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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN
Before: Shri Chandra Poojari, AM & Shri George George K, JM
Per George George K, JM
These appeals at the instance of the assessee are directed against consolidated order of the CIT(A) dated 23.08.2018 . The relevant assessment years are 2010-2011 and 2013-2014.
There is a delay of 19 days in filing the appeals before the Tribunal. The assessee has filed petition for condonation of delay. We have perused the reasons stated for filing the appeals belatedly. We find that there is sufficient cause for the delayed filing of the appeals and no latches can be attributed to the assessee. Hence, we condone the delay in filing this appeal and proceed to dispose off the same on merits.
ITA Nos.530-531/Coch/2018. 2 Sri.Ramakrishna Pillai M. 3. The solitary issue raised in these appeals is whether the CIT(A) is justified in confirming imposition of penalty u/s 271B of the I.T.Act amounting to Rs.37,996 and Rs.1,50,000 for assessment years 2010-2011 and 2013-2014, respectively.
We shall first adjudicate ITA No.530/Coch/2018 concerning assessment year 2010-2011.
ITA No.530/Coch/2018 : Asst.Year 2010-2011
The assessee is an individual engaged in the business of running a petrol pump and also running of bus service. For the assessment year 2010-2011, return of income was filed on 30.03.2012 declaring a sum of Rs.4,94,640. The Assessing Officer, on verification of records, found that the audit report u/s 44AB of the I.T.Act submitted by the assessee did not cover business of running bus service. According to the Assessing Officer, the total turnover on running of bus service exceeded the auditable limit of Rs.40 lakh, and hence, non- submission of audit report in respect of bus service was liable for penalty u/s 271B of the I.T.Act. The assessee submitted that he had not maintained any books of account and receipts and payments of bus service were prepared by the assessee from daily trip sheet and expenditure vouchers. The A.O. rejected the contentions of the assessee and imposed penalty of Rs.37,996.
Aggrieved by the order imposing penalty for assessment year 2010-2011, the assessee preferred appeal to the first
ITA Nos.530-531/Coch/2018. 3 Sri.Ramakrishna Pillai M. appellate authority. Before the first appellate authority it was contended that admittedly no books of accounts were maintained by the assessee and in absence of books of account maintained by him, penalty u/s 271B of the I.T.Act cannot be imposed. For the above said proposition, the assessee relied on the judgment of the Hon’ble Gauhati High Court in the case of Surajmal Parsuram Todi v. CIT [(1996) 222 ITR 691 (Gau)]. The CIT(A), however, rejected the contentions of the assessee and confirmed the imposition of penalty. The relevant finding of the CIT(A) reads as follow:-
“4. I considered the case of the assessee bearing in mind the Hon'ble High Court decision relied on by him but unable to agree with him for a reason that the decision relied on by him is applicable for the persons carrying on legal, medical, engineering or architectural profession as provided u/s 44AA of the Act and not to the case of assessee who did the audit and submitted the requisite report u/s 44AB for the other business i.e. BPCL dealer, he carried out. Having maintained the books of account for the dealership business, what prohibited him to maintain the books of account for the other business of running bus service, the turnover of which has exceeded the auditable limit has not been explained yet by the assessee. To my understanding of the issue, the Hon'ble High Court decision relied on by him would apply to him only when the books of account for both the business carried out by him, has not been maintained at all. The decision may not apply to the case of assessee who maintained the books of account for the dealership business and completed the audit as well for that part of the business. In the absence of audit done for the other business of running bus service the turnover of which has exceeded the auditable limit, I find no infirmity in the decision the assessing authority has taken to levy the penalty u/s 271B and accordingly the same is confirmed. In the result, the appeal stands dismissed.”
Aggrieved by the order of the CIT(A), the assessee has preferred this appeal to the Tribunal. The learned Counsel for the assessee reiterated the submissions made before the
ITA Nos.530-531/Coch/2018. 4 Sri.Ramakrishna Pillai M. Income-tax authorities. Further, the learned AR also relied on the judgment of the Hon’ble Allahabad High Court in the case of CIT v. Bisauli Tractors [(2008) 299 ITR 0219 (All.)]. The learned Departmental Representative, on the other hand, strongly supported the order of the Assessing Officer imposing penalty and the order of the CIT(A) confirming the same.
We have heard the rival submissions and perused the material on record. Admittedly in this case the assessee has not maintained any books of account in regard to the running of bus service. The Hon’ble Gauhati High Court in the case of Surajmal Parsuram Todi v. CIT (supra) and Hon’ble Allahabad High Court in the case of CIT v. Bisauli Tractors (supra), had held that when books of account are not maintained, there cannot be imposition of penalty u/s 271B of the I.T.Act. No contrary judgment of the Hon’ble jurisdictional High Court has been brought to our notice, hence, by following the judgments of the Hon’ble Allahabad High Court in the case of Bisauli Tractors (supra) and Hon’ble Gauhati High Court in the case of Surajmal Parsuram Todi v. CIT (supra), we delete the penalty imposed u/s 271B of the I.T.Act in respect of assessment year 2010-2011. It is ordered accordingly.
In the result, the appeal for assessment year 2010-2011 is allowed.
ITA No.531/Coch/2018 : Asst.Year 2013-2014
There is admittedly a delay of 28 months in filing the audit report. The assessing authority held that there was no
ITA Nos.530-531/Coch/2018. 5 Sri.Ramakrishna Pillai M. reasonable cause explained by the assessee for submitting the audit report belatedly inspite of a number of opportunities being given to the assessee, therefore, he imposed penalty u/s 271B of the I.T.Act.
Before the first appellate authority, the assessee had contended in the grounds of appeal that the audit was completed well before the due date of filing of the return and the report in Form No.3CA and 3CD was also ready on that date. However, the assessee was admitted in hospital during the relevant period, and therefore, the audit report could not be submitted on time. The CIT(A), however, rejected the contentions of the assessee and dismissed the appeal. The relevant finding of the CIT(A) reads as follow:- 6. I considered the above explanation but unable to entertain the same. In the absence of documentary evidences brought out by the assessee at any point of given time. Had the audit really been completed in time, documentary evidences for the audit completed could have been filed to the Assessing Officer immediately then and thereby, further time could have been sought to file the return along with audit report at a later date. This was not done by for the reason best known to the assessee. It is also not known as to why the Assessing Officer was not informed well in tome about the audit which had allegedly been completed already. This apart, credible evidences for the assessee who got hospitalized could also have been made available to the assessing authority when the opportunities were given on 27.01.2016, 02.06.2016 and 07.07.2016. Without answering the core question of why the Assessing Officer was not informed as soon as the audit was completed for the delay that would be caused for further details to be secured from the assessee who was allegedly hospitalized, the assessee cannot have justifiable reason for the delay caused. In the absence of explaining the reason for the delay caused, the penalty levied has to be confirmed and in this regard, I rely on the decision of the Hon'ble High Court of Kerala in the case of K.Ravindranathan Nair vs DClT reported in 319 ITR 108. The penalty levied thus, is confirmed. In the result, the appeal filed for this year also stands dismissed.”
ITA Nos.530-531/Coch/2018. 6 Sri.Ramakrishna Pillai M. 11. The learned AR reiterated the submissions made before the Income-tax authorities. The learned Departmental Representative supported the order imposing of penalty and the order of the CIT(A) confirming the same.
We have heard the rival submissions and perused the material on record. Admittedly, there was a delay of 28 months in filing the audit report. Even before the Tribunal the assessee has stated in the grounds of appeal that he was not well during the relevant period and could not furnish the personal details to the Auditor for the submission of the audit report. Howeer, no material / evidence has been brought on record to prove that the assessee was not well during the relevant period and there was reasonable cause as mandate u/s 273B of the I.T.Act, for submission of audit report belatedly. Hence, we hold that the penalty imposed u/s 271B of the I.T.Act in respect of assessment year 2013-2014 has been imposed correctly and we uphold the same. It is ordered accordingly.
In the result, the appeal filed for assessment year 2010- 2011 is allowed and for assessment year 2013-2014 is dismissed.
Order pronounced on this 04th day of September, 2019.
Sd/- Sd/- (Chandra Poojari) (George George K.) ACCOUNTANT MEMBER JUDICIAL MEMBER
Cochin ; Dated : 04th September, 2019. Devdas*
ITA Nos.530-531/Coch/2018. 7 Sri.Ramakrishna Pillai M.
Copy of the Order forwarded to : 1. The Appellants 2. The Respondent. 3. The CIT(A), Thiruvananthapuram 4. The Pr.CIT, Thiruvananthapuram 5. DR, ITAT, Cochin 6. Guard file.
BY ORDER,
(Asstt. Registrar) ITAT, Cochin