TMI Blog2017 (5) TMI 1165X X X X Extracts X X X X X X X X Extracts X X X X ..... is not the case of the Revenue that audit report in Form 3CEB was not obtained by the assessee on 02.09.2010. Accordingly, we hold that the assessee had substantively compiled with the provisions of the Act by obtaining the audit report in time, by filing the same though belatedly on 20.01.2012 but before the date of completion of assessment. Thus no hesitation in directing the Ld. AO to delete the penalty u/s. 271BA - Decided in favour of assessee. - I.T.A. No. 1799/Mds/2016 - - - Dated:- 16-2-2017 - SHRI M. BALAGANESH, ACCOUNTANT MEMBER, AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER For The Appellant : Shri S. Sridhar, Advocate For The Respondent : Shri A.V. Sreekanth, JCIT ORDER PER M. BALAGANESH, ACCOUNTANT MEMBER: This appeal of the assessee arise out of the order of the Ld. Commissioner of Income Tax (Appeals)- 8, Chennai vide proceedings in ITA No. 03/2012-13 dated 31.03.2016, Passed against the order of the Ld. AO u/s. 271BA of the Income Tax Act dated 24.02.2012 levying penalty for the sum of ₹ 1 lakh. 2. The only issue to be decided in the appeal is as to whether the Ld. CIT(A) was justified in upholding the levy of penalty u/s. 271BA of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax (Appeals) 8, Chennai dated 31.03.2016 in I.T.A.No.03/2012-13 for the above mentioned Assessment Year is contrary to law, facts, and in the circumstances of the case. 2. The CIT (Appeals) erred in confirming the levy of penalty u/s 271BA of the Act for the belated filing of Form NO.3CEB without assigning proper reasons and justification. 3. The CIT (Appeals} failed to appreciate that the provisions of section 271BA of the Act had no application to the facts of the case and ought to have appreciated that the belated furnishing of the audit report was consequent to the reasons which could be considered as reasonable cause within the scope of section 273B of the Act thereby vitiating the action to sustain the levy of penalty. 4. The CIT (Appeals) failed to' appreciate that the furnishing of audit report along with the return of income should not be construed as mandatory and ought to have appreciated that the audit report was available at the time of framing of the assessment thereby vitiating the levy of penalty for technical reasons overlooking the reasonable cause shown by the appellant for belated filing. 5. The CIT (Appeals) failed to appreciate th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stance with regard to the various international transactions entered into by assessee. In the instant case, the Ld. TPO was made available of the said audit report on 20.01.2012 and had not suggested any adjustment to the Arms Length Price (ALP) of the international transactions carried out by the assessee. Admittedly, the said audit report was made available before the Ld. TPO before the date of completion of his proceedings on 22.01.2014. In these facts and circumstances, the assessee should not be invited with the burden of levy of penalty. In support of this arguments he placed reliance on the decisions of Hon'ble Madras High Court in the case of CIT Vs. A.N. Arunachalam reported in 208 ITR 481 (1994). In response to this, the Ld. DR vehemently relied on the orders of the lower authorities and stated that the assessee did not file the audit report in Form 3CEB even when it was demanded by the Ld. AO in the scrutiny proceedings. The same was filed before the Ld. TPO only on a later date. Moreover, the provisions of section 271BA of the Act in its unambiguous language warrants levy of penalty as the automatic measure if the audit report is not filed within the stipulated time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... except that it should be filed along with the return. Since there is a provision for extending the time for filing the return, all that the assessee was required to do was to delay the filing of the return until the audit report was made available. As the Tribunal has observed, the preparation of the audit report was beyond the control of the assessee and hence the assessee could justifiably delay the filing of the return itself so that it is accompanied by the audit report. In such an event, the ITO could not deny the deduction since the purpose of the section would have been fulfilled even though the return itself was filed beyond the prescribed time. For instance, in the present case, if the assessee had filed the return with the audit report on 21st Oct., 1977, the relief could not have been denied whereas it is sought to be denied only because he filed the return on 29th June, 1977, and filed the audit report later on 21st Oct., 1977, when it was made available. The section cannot also be construed to give such an incongruous result. As far as we can see, the stress laid by this provision was only to have the accounts audited and to make the audit report available for the ITO ..... X X X X Extracts X X X X X X X X Extracts X X X X
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