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TMI Blog2018 (3) TMI 1704X X X X Extracts X X X X X X X X Extracts X X X X ..... in reasons beyond the control of the petitioner Company. As per Section 139(1) of the Act, the due date for filing of Return Of Income, in case of assessee having specified international/domestic transactions, was 30.11.2014. There was a delay of 37 days in filing the Return Of Income for the relevant assessment year. It is mandatory on the part of the Company to get its account audited under Section 44 AB of the Act. To file its Return Of Income, Tax Audit Report under Section 44 AB is mandatory, without which the return will not be accepted by the System as a correct return. (ii)The petitioner Company sought the services of M/s.S.R.Batliboi & Associates, LLP to conduct audit of its Tax accounts and issue a report thereon in Form-3CB prescribed under the Income Tax Rules, 1963. The Chartered Accountant Firm had also agreed to carry out the assignment in terms of their Assignment Letter dated 08.09.2014. Pursuant to the aforesaid engagement Letter, the Audit exercise commenced on 15.09.2014. The team members of M/s.S.R.Batliboi & Associates were deployed and the petitioner Company co-operated with the Audit Firm in providing with necessary details, which were called for from time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k for an alternative Auditor, after getting written communication from M/s.S.R.Batliboi & Associates, who could be assigned the work of carrying out the Tax Audit as required under Section 44 AB of the Income Tax Act. (vi)The petitioner Company, after due deliberations and taking note of various aspects, had approached M/s.CNGSN Associates, LLP, Chartered Accountants, Chennai, to conduct the Tax Audit work as required under the statute and issue a Tax Audit Report. The assignment was accepted by M/s.CNGSN Associates subject to No Objection Certificate from the existing Auditors viz., M/s.S.R.Batliboi & Associates. M/s.CNGSN Associates, by their letter dated 29.11.2014, also requested M/s.S.R.Batliboi & Associates to issue No Objection Certificate to conduct the audit work. But, however, no such NOC was given. Only upon the insistence by the petitioner Company and after considerable lapse of time by a written communication dated 15.12.2014, the Statutory Auditor viz., M/s.S.R.Batliboi & Associates expressed their inability to carry out their audit and to issue report thereon. (vii)The petitioner cannot appoint an alternative Auditor without getting NOC from the existing Auditor. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lties, which were faced by the petitioner Company in filing the Return Of Income within the due date. (xii)By order dated 01.06.2016, the 1st respondent refused to condone the delay of 37 days in filing the Return Of Income. Though the application was filed by the petitioner for condoning the delay of 37 days as early as on 25.03.2015, the 1st respondent had disposed of the application only on 01.06.2016. In these circumstances, the petitioner has filed the above Writ Petition. 3.The brief case of the respondents is as follows: (i)According to the respondents, the 1st respondent had passed a valid order. Further, the respondents contended that the petitioner has not established that the delay in finalization of the Tax Audit Report is only because of the Auditor's fault. The petitioner has not been able to establish that the work of the Tax Audit got delayed due to the professional misconduct on the part of the Auditor, for which the petitioner had not resorted to any legal action against the Auditor. The reasons given by the petitioner for the condonation of the delay were duly considered by the 1st respondent and it was held that the grounds raised were not valid so as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion Bench of this Court held as follows: "... 9.When once an authority has been conferred discretion to condone the delay, application seeking condonation of delay of one day cannot be rejected for such reasons as are assigned by the Board in its order dated 05.05.2014. Hence, we are of the opinion that the Board has not exercised its discretion properly in the matter and in keeping with the legal principles relevant for such consideration. Hence, we have no hesitation to come to the conclusion that the learned Single Judge has rightly allowed the writ petition and set aside the order dated 05.05.2014 passed by the Board." (iii)Un-reported order of this Court made in W.P.No.5137 of 2015 [M/s.Regen Infrastructure & Services Pvt. Ltd. Vs. The Central Board of Direct Taxes dated 14.03.2016 wherein this Court held as follows: "... 7.In the case on hand, the petitioner has satisfactorily explained the reasons for the delay in filing the return on 16.10.2010 instead of 15.10.2010. Further, it is not the case of the respondents that the petitioner is not entitled to claim the carry forward loss under Section 139(3) of the Act. When the petitioner is entitled to claim the carry f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory auditors in place of the Departmental Auditors. This change was made in respect of all the societies. Therefore, the petitioner, in our view, cannot be blamed for the delay in carrying out its audit, as the same was beyond its control. The contention of the learned counsel for the respondents that the Departmental auditors, in fact, had started the audit in the year 2000 and it was for the petitioner to get the audit expedited, cannot be accepted. Though the departmental auditors might have started the audit, it appears that pursuant to the said policy decision that was taken, the departmental auditors were replaced by the Chartered Accountants to be the statutory auditors, which was by letter dated 3-9-2001. In our view, therefore, the said reason mentioned by the petitioner in its application, deserves to be accepted. The other reasons cited for condonation of delay, therefore, need not be gone into as the petitioner in out view, would be entitled to condonation of delay on the said ground alone. The other grounds raised in the petition to assail the impugned order also need not be gone into. It is further required to be noted that the Assessing Officer imposed a penalty of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort which the petitioner seeks to balance the Chartered Accountant, who according to the petitioner has to conduct the audit under Section 44 AB of the Act." (iii)[2018] 91 Taxmann.com 241 (Delhi) [B.U.Bhandari Nandgude Patil Associates Vs. Central Board of Direct Taxes] wherein the Delhi High Court held that unless compelling and good reasons are shown and established for grant of extension of time, the extension cannot be claimed as a vested right on mere asking and on basis of vague assertions without proof. 6.On a careful consideration of the materials available on record, the submissions made by the learned senior counsel on either side and also the judgments relied upon by the learned counsel on either side, it could be seen that for the assessment year 2014-15, the petitioner Company had filed its Return Of Income, as required under Section 139 of the Act, on 07.01.2015, when the due date for filing of the Return Of Income, in case of assessee having specified international/domestic transactions, was 30.11.2014. There was a delay of 37 days in filing the Return Of Income for the relevant assessment year 2014-15. The petitioner contended that they sought the services of M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s.CNGSN Associates, LLP, Chartered Accountant, Chennai as their Tax Auditor and requested them to prepare the Tax Audit Report. The assignment was accepted by M/s.CNGSN Associates on 29.11.2014, subject to NOC from the existing auditors viz., M/s.S.R.Batliboi & Associates. M/s.CNGSN Associates, by their letter dated 29.11.2014, also requested M/s.S.R.Batliboi & Associates to issue NOC. However, no such NOC was given by the erstwhile Auditors. After repeated requests made by the petitioner, M/s.S.R.Batliboi & Associates gave their written communication dated 15.12.2014 expressing their inability to carry out their audit and to issue a report. 8.It is pertinent to note that the petitioner cannot appoint an alternative Auditor without getting the written letter/NOC from the existing Auditor. Thereafter, after getting NOC from the erstwhile Auditor, the petitioner uploaded the Return Of Income along with the Tax Audit Report on 07.01.2015, hence, there was a delay of 37 days in filing the Return Of Income. By delaying the submission of the Return Of Income, the petitioner did not stand to benefit in any manner whatsoever. 9.When the petitioner had satisfactorily explained the reason ..... X X X X Extracts X X X X X X X X Extracts X X X X
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