S A POULTRY FARMS,KANCHEEPURAM vs. ITO WARD2, KANCHEEPURAM

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ITA 632/CHNY/2023Status: DisposedITAT Chennai31 August 2023AY 2017-183 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee had a reasonable cause for the delay in uploading the return due to technical issues and reliance on the auditor. Therefore, the penalty was deleted.

What were the facts?

The assessee, a partnership firm, failed to upload its tax audit report and return of income electronically due to technical issues. The Assessing Officer (AO) levied a penalty under Section 271B for failure to get accounts audited under Section 44AB.

What were the issues?

Whether technical issues and reliance on the auditor constitute a reasonable cause for non-compliance with electronic filing requirements, thereby negating the penalty under Section 271B.

Which sections of the Income-tax Act were involved?

Section 271B,Section 273B,Section 44AB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, CHENNAI

Before: HON’BLE SHRI MAHAVIR SINGH, VP & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2017-18 arises out of the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [CIT(A)] dated 29-03- 2023 confirming penalty u/s 271B for Rs.1.50 Lacs. The impugned penalty has been levied by Ld. AO vide order dated 23-06-2021. At the time of hearing, none appeared for assessee. The Ld. Sr. DR submitted that penalty was mandatory in nature and therefore, the impugned order may be confirmed. Having considered material on record, the appeal is disposed-off as under.

2.

The impugned penalty stem from the facts that the assessee is a partnership firm carrying on business of running a poultry farm. The assessee, in response to notice u/s 142(1), filed Tax Audit Report dated 20-08-2017 on 25-11-2019 electronically. However, due to technical issues, the return could not be uploaded electronically. The Ld. AO, framed assessment on best judgment basis on 22-11-2019 and triggered impugned penalty u/s 271B for failure to get the accounts audited u/s 44AB. Rejecting assessee’s submissions, Ld. AO levied impugned penalty of Rs.1.50 Lacs.

3.

During appellate proceedings, the assessee submitted that there was reasonable cause u/s 273B since the work was entrusted to the auditor. However Ld. CIT(A) held that penalty was mandatory in nature and accordingly, confirmed the impugned penalty. Aggrieved, the assessee is in further appeal before us. 4. We find that the assessee got his accounts audited and obtained Tax Audit Report on 20-08-2017. The same was uploaded electronically on 25-11-2019. However the return of income could not be furnished due to technical issues. The assessee was depended on auditor for uploading of the return along with return of income. Therefore, the same, in our considered opinion, is sufficient cause within the meaning of Sec. 273B and therefore, not a fit case for imposition of penalty. By deleting the impugned penalty, we allow the appeal.

5.

The appeal stand allowed. Order pronounced on 31st August, 2023.

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