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TMI Blog2022 (3) TMI 776X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act for not furnishing tax audit report under section 44AB of Income Tax Act, 1961 ("the Act" for short). None appeared for the assessee but a written submission was filed by the assessee. 3. Brief facts of the case is that assessee is dealing in land/property and trading in sands/stones. There was search and seizure operation under section 132 of the Act carried out at the premises of Dhanjimama group of cases on 3.7.2012 wherein one of the case of the present assessee was also included. During the course of search, most of the documents, books of accounts, etc. were seized by the Investigation Wing of the Income Tax Department, and investigation continued till end of the financial year. For the Asstt.Year 2013-14, the assessee filed hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counts and documents were seized by the search party, and were not made available to the assessee for finalization of its accounts, nor any copies thereof were with the assessee. Further, post search investigation, all the documents were with the Investigation Officer, and therefore, it was practically impossible for the assessee to get his accounts audited under section 44AB of the Act, and therefore, looking to the genuine hardship, no penalty under section 271B of the Act be levied. Assessee also relied upon various case laws to support his case. However, the ld.AO did not accept the contentions of the assessee. He levied penalty of Rs. 54,106/- being a sum equal to one-half percent of the gross receipts of Rs. 1,08,21,181/-. 4. Aggriev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e proper books of accounts. Your Honour will appreciate that merely because of procedural lapse, the appellant may not be penalized." 5. As mentioned in the foregoing paragraph, at the time of hearing non-appeared on behalf of the assessee. However, the assessee has filed written submission dated 28.10.2021, which was placed on record. In the written submissions, the assessee interalia pleaded that the figures of Rs. 1,24,46,720/- mentioned in the computation part in the assessment order is not correct figure, but actual figure of disclosure is Rs. 94,40,275/-. It is further pleaded that the actual nature of disclosure was not known because no such break-up was given and therefore simply this amount cannot be termed as "total turnover or s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mstances, considered validity of imposing penalty under section 271BA read with Section 92E of the Act. The Tribunal held that imposition of penalty under section 273B of the Act is not mandatory, rather it is discretionary, because if the assessee proves that there was a "reasonable cause" for the said failure, then the AO ought to have considered the same and then proceed with levying penalty. The findings of the Tribunal in this regard read as follows: "7. We have given out thoughtful consideration on the issue of levy of penalty under section 271BA of the Act and heard the rival submissions and perused the material available on record. In the facts of the present case, admittedly the assessee failed to upload Form No. 3CEB in terms of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... encompasses that certain penalties "shall" not be imposed in cases where "reasonable cause" is successfully pleaded. It is seen that penalty imposable u/s 271BA is also included therein. By the said provisions, the Parliament has unambiguously made it clear that no penalty "shall be" imposed, if the assessee "proves that there was a reasonable cause for the said failure". As noticed, if the statutory provision shows that the word "shall" has been used in Section 271BA, then the imposition of penalty would have been mandatory. Section 273B as noted further throws light on the legislative intent as it specifically provides that no penalty "shall" be imposed if the assessee proves "that there was reasonable cause for the said failure". 7.3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r authorities that non-submission of audited accounts was due to non-finalisation of accounts, because all the books of accounts and other relevant materials were seized by the Investigation Wing of the department, and they were not made available to the assessee. The assessee has filed his return of income on the basis of provisional accounts, and such return was accepted by the department. These facts were not denied by the Revenue and attained finality. The ld.AO has simply invoked his discretionary power under section 271B without appreciating the reasons putforth by the assessee for the alleged failure on his part for non-submission of audited accounts. We are of the considered option that the explanation offered by the assessee ought ..... X X X X Extracts X X X X X X X X Extracts X X X X
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