9911796707
TMI Blog2024 (12) TMI 876X X X X Extracts X X X X X X X X Extracts X X X X ..... ed requires to be cancelled. 3. Without prejudice to the above, the learned A.O. is not justified in imposing penalty u/s. 271B of the Act, under the facts and in the circumstances of the appellant's case. He failed to appreciate that the appellant was prevented by reasonable cause from obtaining and furnishing the Audit Report u/s. 44AB within time and the delay in obtaining and furnishing the Audit Report was not out of willful default or neglect on the part of the appellant and consequently, the penalty levied deserves to be cancelled. 4. Without prejudice to the above, the penalty levied is excessive and liable to be reduced substantially. 5. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs." 2. At the outset, the ld. AR of the assessee submitted that there is a short delay of 8 days in filing the appeal before this Tribunal. On perusal of the record, we find that the assessee has filed an affidavit dated 14/11/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of substantial justice deserve to be preferred, for the other side cannot claim to have vested right for injustice being done because of non-deliberate delay. Moreover, no counter-affidavit was filed by the Revenue denying the allegation made by the assessee. It is not the case of the Revenue that the belated appeal was filed deliberately. Therefore, we have to prefer substantial justice rather than technicality in deciding the issue. Therefore, in our opinion, this is a fit case to condone the short delay of 8 days in filing the appeal before this Tribunal. Accordingly, the delay is condoned and the appeal is admitted for adjudication. 5. Now coming to the brief facts of the case are that the assessee is an individual who derives Income from Business and other Sources. For the year under appeal, the assessee had filed his return of income on 30/03/2019 reporting a taxable income of Rs. 13,56,930/-. Thereafter, the assessee's case was selected for scrutiny through CASS and in course of the assessment proceedings, the assessee furnished all the details and particulars as called for by the AO. After verification of the details submitted by the assessee, the assessment proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imately I had obtained the Audit Report dated 30/03/2019. Unfortunately I was not aware that the Audit report was required to be filed 30/09/2017 [extended date 31/10/2017] and hence there was a delay in filing the same. Considering that this year is the first year of Audit UIs 44ÅB of the Act and considering my ignorance of the statutory provisions, I request your Honour to take a lenient view in the matter and drop the proceedings initiated u/s 271B of the Act for the advancement of substantial cause of Justice". 5.2 After the aforesaid reply was filed by the assessee before the jurisdictional A.O., as contended the assessee did not receive any other notice by email. Instead, the assessee received the impugned order from the NFAC after consideration of the above submissions made by him. In the impugned order, the NFAC has imposed penalty of Rs. 1,32,456/- holding that the ignorance of the law can never be an excuse to avoid legal penal action. The court presumes that every person is aware of the law and hence cannot claim ignorance. It has been held that the assessee is not permitted to plead ignorance as a defense to escape the rigors of the law, if it so, it is very easy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... audit report as required u/s 44AB of the Act, the penalty levied may be sustained. 8. We have heard the rival submissions and perused the materials available on record. Before proceeding further, we may take note of the provisions of section 44AB, 271B and 273B of the Act for the purpose of this case, which reads as follows: 44AB. Audit of accounts of certain persons carrying on business or profession. Every person,- (a) carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds one crore rupees in any previous year [***]: [Provided that in the case of a person whose- (a) aggregate of all amounts received including amount received for sales, turnover or gross receipts during the previous year, in cash, does not exceed five per cent of the said amount; and (b) aggregate of all payments made including amount incurred for expenditure, in cash, during the previous year does not exceed five per cent of the said payment, this clause shall have effect as if for the words "one crore rupees", the words "[ten] crore rupees" had been substituted:] [Provided further that for the purposes of this clause, the payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness or profession audited under such law before the specified date and furnishes by that date the report of the audit as required under such other law and a further report by an accountant in the form prescribed under this section. Explanation.-For the purposes of this section,- (i)"accountant" shall have the same meaning as in the Explanation below subsection (2) of section 288; (ii)"specified date", in relation to the accounts of the assessee of the previous year relevant to an assessment year, means [date one month prior to] the due date for furnishing the return of income under sub-section (1) of section 139. 271B. [ Failure to get accounts audited. [Inserted by Act 21 of 1984, Section 30 (w.e.f. 1.4.1985).] - If any person fails ][* * *] [ Omitted by Act 46 of 1986, Section 21 (w.e.f. 10.9.1986).] to get his accounts audited in respect of any previous year or years relevant to an assessment year or [furnish a report of such audit as required under section 44-AB] [ Substituted by Act 22 of 1995, Section 48, for certain words (w.e.f. 1.7.1995).], the [Assessing Officer] [ Substituted by Act 4 of 1988, Section 2, for " Income-tax Officer" (w.e.f. 1.4.1988).] may direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provisions if he proves that there was reasonable cause for the said failure.]". 9. An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged, either acted deliberately in defiance of law or was guilty of conduct, contumacious 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. 10. Section 273B starts with the non obstante clause and provides that notwithstanding anything contained in several provisions enumerated therein including section 271B, no penalty shall be imposable on the person or the assessee, as the case may be, for failure referred to in the said provisions, if he proves that there was reasonable cause for the said failure. A clause beginning with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee demonstrated that there was a reasonable cause for the said failure as per the provisions contained in section 273B of the Act. From the conduct, behavior and attitude of the assessee, it is clear that as this was the first year of the audit and the assessee had also not filed any returns of income for the earlier years as the income was way below the maximum amount not chargeable to tax, the assessee was not aware that the audit report was required to be filed on or before due dates. Further there was a delay in identifying a Chartered Accountant for carrying out the Audit & finally obtained the audit report on 30/03/2019. The main crux for the delay was that the assessee was on an honest & bonafide belief that there is no due date for filing the audit report separately and the same can be filed along with the return of Income within the time prescribed u/s 139(4) of the Act. 12.1 We have also perused the Assessment record and found that the assessee has only committed a technical breach without any loss to the exchequer of the Government as there was no addition made by the Ld.AO during the assessment proceeding. The AO has also observed that the case is audited u/s 44 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
