TMI Blog2023 (1) TMI 573X X X X Extracts X X X X X X X X Extracts X X X X ..... pecial auditors for getting the special audit u/s. 142A of the Act completed. Law does not compel one to do that which one cannot possibly perform. Where the law creates a duty or charge and the party is disabled to perform it, without any default in him and has no remedy over it, there the law will, in general, excuse him. Therefore, when it appears that the performance of the formalities prescribed by a statute has been rendered impossible by circumstances over which the person interested had no control, the circumstances will be taken as a valid excuse. Assessment proceedings furnished by the Ld. Counsel, it is evidently demonstrated that there exists a reasonable cause within the meaning of section 273B of the Act which prevented the assessee in meeting the compliance requirement in respect of special audit u/s. 142(2A) of the Act. - Levy of penalty directed to be deleted. - ITA Nos.11 to 17/LKW/2021 - - - Dated:- 9-1-2023 - Shri Mahavir Singh, Vice President And Shri Girish Agrawal, Accountant Member For the Appellant : Shri Rakesh Garg, Advocate For the Respondent : Shri Amit Nigam, DR ORDER PER BENCH: All the above captioned appeals filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thus levied the penalty under challenge before the Tribunal. Ld. AO also observed from the ITD system of the Department that Form 3CA and Form 3CD for the audit reports were available in the case of assessee for AYs. 2013-14 to 2016-17. He noted that since no books of account and other documents were maintained by the assessee, audit reports uploaded by the assessee are incorrect and fabricated and not backed by any books of account. In contradiction to this observation and noting, Ld. AO in para 4 of his order noted that during the course of search, various incriminating documents/information relating to Shri Ashesh Agrawal were also found and seized . 4. The issue in these present appeals before us was elaborately dealt in another set of appeals in the case of Ashesh Agrawal Vs. DCIT, Central Circle-1 in ITA No. 292 to 298/LKW/2020 for AYs. 2010-11 to 2016-17 (assessee himself), though in respect of penalty imposed u/s. 271(1)(b) of the Act. The reasonable cause as stated u/s. 273B considered in those stated appeals relating to penalty imposed u/s. 271(1)(b) exists and applies in the present set of appeals also. As this case of Ashesh Agrawal was also part of the same group ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the assessment order. Ld. AO without taking into cognizance of the request of keeping the penalty proceeding in abeyance, proceeded to complete the penalty proceeding by levying a penalty of Rs. 10,000/- u/s. 271(1)(b) of the Act. Aggrieved, assessee went in appeal before the Ld. CIT(A), who confirmed the action of the Ld. AO. 3.2. While dismissing the appeal of the assessee, Ld. CIT(A) stated in para 9.1, various principles which are relevant in penalty imposition and are extracted as under: 9.1 Section 271(1)(b) of the Act lays down that if the Assessing officer, in the course of any proceeding under this Act, is satisfied that any person who has failed to comply with a direction under sub-section (2A) of section 142, he may direct that such person shall pay by way of penalty. Further, various principles which are relevant in penalty imposition are as under: (a) There is no room for bringing in the rules of criminal law. (b) Reference to the absence of mens rea or failure of the Revenue to establish mens rea is entirely irrelevant. (c) The onus was on the assessee to answer the charge of having failed to comply with the direction. (d) Imposition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord from the noting of the order sheet entries. Accordingly, Ld. Counsel submitted that there exists reasonable cause within the meaning of section 273B of the Act and, therefore, the penalty so imposed is ought to be deleted. 7. Per contra, Ld. CIT, DR placed reliance on the orders of the authorities below. 8. We have heard the rival contentions and have carefully gone through the material available on record and have given our thoughtful consideration to the submissions made before us. Before adverting on the issue, we appraise ourselves with the relevant provisions of law which are reproduced hereunder: 271(1) If the Assessing officer or the Commissioner (Appeals) or the Principal Commissioner or Commissioner in the course of any proceedings under this Act, is satisfied that any person (a) .. (b) has failed to comply with a notice (under sub-section (2) of section 115WD or under sub-section (2) of section 115WE or) under sub-section (1) of section 142 or sub-section (2) of section 143 (or fails to comply with a direction issued under sub-section (2A) of section 142) or he may direct that such person shall pay by way of penalty (i) .. (ii) In t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said to be a cause which prevents a man of average intelligence and ordinary prudence, acting under normal circumstances, without negligence or inaction or want of bonafide. 9.2. Reference is also made to the legal maxim impotentia excusat legam and lex non cogit ad impossibilia in this respect. When there is an invincible disability to perform mandatory part of the law that impotentia excuses. Law does not compel one to do that which one cannot possibly perform. Where the law creates a duty or charge and the party is disabled to perform it, without any default in him and has no remedy over it, there the law will, in general, excuse him. Therefore, when it appears that the performance of the formalities prescribed by a statute has been rendered impossible by circumstances over which the person interested had no control, the circumstances will be taken as a valid excuse. 10. It is also pertinent to note that ideally an appeal arising from penalty order is to be decided after finalization of the quantum proceedings. This practice embargo is not applicable on the ld. Assessing Officer for visiting the assessee with penalty but after passing the penalty order, the Appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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