TMI Blog2023 (7) TMI 332X X X X Extracts X X X X X X X X Extracts X X X X ..... t justified - Decided in favour of assessee. - ITA. No. 149/JP/2023 - - - Dated:- 3-5-2023 - SHRI SANDEEP GOSAIN, JM SHRI RATHOD KAMLESH JAYANTBHAI, AM For the Assessee by : Shri P. C. Parwal (C.A.) For the Revenue by : Smt Monisha Choudhary (Addl. CIT) ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM This appeal is filed by assessee and is arising out of the order of the National Faceless Appeal Centre, Delhi dated 13/02/2023 [here in after (NFAC)/ ld. CIT(A)] for assessment year 2017-18 which in turn arise from the order of the penalty passed u/s. 271B of the Act dated 29.12.2021 by the National Faceless Assessment Center, Delhi [ here in after the ld. AO./NeFAC ] 2. In this appeal, the assessee has raised following grounds: - 1. The Ld. CIT(A), NFAC has erred on facts and in confirming the levy of penalty of Rs. 1,50,000/- u/s 271B of the IT Act, 1961 only for the delay of 1 day in filing the tax audit report. 3. The fact as culled out from the records is that the assessee filed her return of income for AY 2017-18 on 20.01.2018 declaring an income of Rs. 22,11,260/-. She deals in retail sale of Petrol Diesel. The case was selected fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee preferred this appeal solely on the levy of the penalty u/s. 271B of the Act. To support the ground so raised the ld. AR appearing on behalf of the assessee has placed their written submission which is extracted in below; 1. The assessee is running a petrol pump in the name style M/s Sushila Indian Oil Filing Station . Against returned income of Rs. 22,11,260/-, assessment was framed u/s 143(3) on 21.12.2019 at total income of Rs. 23,11,260/-. Penalty proceedings u/s 271B was initiated for the reason that due date of filing the audit report was 07.11.2017 but auditor has signed verified the audit report on 08.11.2017. 2. In course of penalty proceedings assessee explained that it got the accounts audited and obtained tax audit report on 07.11.2017 but due to some technical glitches it was submitted on 08.11.2017. However, the AO held that audit report has been submitted by the assessee on 08.11.2017 which was signed by the auditor and assessee at 09.27.38 PM and at 09.27.54 PM respectively and therefore, the reasons submitted by the assessee is not correct and an afterthought. Accordingly, he imposed penalty of Rs. 1,50,000/- u/s 271B of the Act. 3. The L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statute. Staywell Hotels (P) Ltd. Vs. CIT (2006) 283 ITR 92 (MP) (HC) The held part of the decision reads as under:- The use of expression may in s. 271B confers discretion on the AO to impose penalty for the breach of s. 44AB. This, therefore, contemplates as to whether explanation sought from assessee in not complying with the requirement of s. 44AB is to be accepted or not by AO. In other words, though compliance of s. 44AB is mandatory for assessee its noncompliance within time attracts rigour of s. 271B, i.e., penalty. However, on a sufficient cause being shown, the AO is vested with the discretion to condone the delay and relieve the assessee from payment of penalty amount. It then depends upon facts of each case as to whether case for acceptance of explanation is made out by the assessee, or not? The explanation offered by the assessee in this case ought to have been accepted being a sufficient one. The delay in filing certain form was not inordinate. It was hardly of two months. Secondly, there was explanation offered for such delay. The delay thus did not have any deliberate intention on the part of assessee, nor could their conduct be regarded as c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute. 7. Per contra, ld. DR supported the orders of the lower authority and stated that once there is delay it is delayed. The ld. DR further submitted that the assessee has even though liable to get his requisite audit report failed to do and the levy of penalty is correct and the same be upheld as the contentions raised by the assessee is nothing but the afterthought. 8. We have heard the rival contentions, perused the material on record and order of the lower authorities. We have also gone through t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty for the breach of section 44AB. This, therefore, contemplates as to whether explanation sought from assessee in not complying the requirement of section 44AB is to be accepted or not by Assessing Officer ? In other words, though compliance of section 44AB is mandatory for assessee its noncompliance within time attracts rigour of section 271B, i.e., penalty. However, on a sufficient cause being shown, the Assessing Officer is vested with the discretion to condone the delay and relieve the assessee from payment of penalty amount. It then depends upon facts of each case as to whether case for acceptance of explanation is made out by the assessee, or not ? 7. In our opinion, the explanation offered by the assessee in this case ought to have been accepted being a sufficient one. The delay in filing certain Form was not inordinate. It was hardly of two months. Secondly, there was explanation offered for such delay. The delay, thus, did not have any deliberate intention on the part of assessee, nor could their conduct be regarded as contumacious or with a view to evade payment of tax. If at all, there is any breach it was technical or venial in nature. In the facts of this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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