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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 13.02.2019. The relevant assessment years are 2008-2009 and 2009-2010. Common issues are raised in these appeals, hence, they were heard together and are being disposed off by this consolidate order.
Brief facts of the case are as follows: The assessee is an individual, who is engaged in the business of cashew processing and exporting of cashew kernels. For the assessment years 2008-2009 and 2009-2010, the turnover of the assessee was exceeding Rs.1 crore. As per the provisions of section 44AB of the I.T.Act, the assessee was
ITA Nos.302-303/Coch/2019. 2 Sri.Hassan Azeez M. required to get his books of account audited and file return of income within the prescribed time. The assessee failed to get his books of account audited and belatedly filed the return of income. Hence, penalty proceedings u/s 271B of the I.T.Act were initiated and penalty orders for all the three assessment years mentioned above were passed on 28.03.2013.
Aggrieved by the orders imposing penalty u/s 271B of the I.T.Act amounting to Rs.1 lakh for each assessment years, the assessee preferred appeals to the first appellate authority. The CIT(A) confirmed the imposition of penalty u/s 271B of the I.T.Act and dismissed the appeals filed by the assessee vide its consolidated order dated 13.02.2019.
Aggrieved by the CIT(A)’s order in confirming the penalty imposed u/s 271B of the I.T.Act for assessment years 2008- 2009 and 2009-2010, the assessee has filed these appeals before the Tribunal. The common contentions raised in all the appeals is that the penalty order passed u/s 271B of the I.T.Act is barred by limitation. It was submitted that for all the assessment years as per the provisions of section 275(1)(c) of the I.T.Act, the penalty orders should have been passed on or before 30.06.2011, whereas in these cases, the penalty orders were passed only on 28.03.2013. Therefore, it was submitted that it was barred by limitation. The learned Departmental Representative present was duly heard in this matter.
We have heard the rival submissions and perused the material on record. Admittedly, the assessee has filed the
ITA Nos.302-303/Coch/2019. 3 Sri.Hassan Azeez M. appeals before the first appellate authority as regards the quantum assessment. The penalty u/s 271B of the I.T.Act was imposed for non-audit of books of account within the prescribed time limit provided. Since the annual turnover determination was a subject matter of appeal, the limitation law as per the proviso to section 275(1)(a) of the I.T.Act would have application and not section 275(1)(c) of the I.T.Act as contended by the assessee. Hence, this common contention raised by the assessee for all the assessment years are rejected. Now we shall consider whether the penalty can be sustained for each of the assessment years.
Assessment Year 2008-2009
The contention raised by the assessee is that the assessee has not maintained books of account for the assessment year 2008-2009, and therefore, penalty cannot be imposed u/s 271B of the I.T.Act. For the above said proposition, the learned AR had 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 Hon’ble Allahabad High Court had observed that separate penalty proceedings has been provided for non- maintenance of account u/s 271A of the I.T.Act, whereas, for not getting the accounts audited and not furnishing the audit report, the penalty to be imposed is u/s 271B of the I.T.Act. It was held by the Hon’ble High Court that the if a person has not maintained the accounts book or any accounts the question of its audit does not arise and in such an event the imposition of penalty is under the provision contained in section 271A of the
ITA Nos.302-303/Coch/2019. 4 Sri.Hassan Azeez M. I.T.Act. Therefore, it was concluded by the Hon’ble Allahabad High Court that the penalty proceedings u/s 271B of the I.T.Act would not apply. No contrary judgment of the Hon’ble jurisdictional High Court has been brought to our notice, hence, by following the judgment of the Hon’ble Allahabad High Court in the case of Bisauli Tractors (supra), we delete the penalty imposed u/s 271B of the I.T.Act in respect of assessment year 2008-2009. It is ordered accordingly.
6.1 In the result, the appeal for assessment year 2008-2009 is allowed.
Assessment Year 2009-2010 7. Admittedly in this case, no audit report has been filed for assessment year 2009-2010. It is the contention of the assessee that there was a reasonable cause as mandated u/s 273B of the I.T.Act. It was submitted by the learned AR that consequent to search and seizure operation, the entire books of account and records were taken by the department. Further it was stated that the Chartered Accountant of the assessee was suffering from chronic illness and succumbed to illness on 09.03.2016. It was stated that the above two incidence had let to a situation of the books of account not being audited. The learned Departmental Representative supported the orders of the Income-tax authorities.
7.1 We have heard the rival submissions and perused the material on record. The search and seizure in assessee’s case was conducted on 06.01.2009. The assessee had obtained the
ITA Nos.302-303/Coch/2019. 5 Sri.Hassan Azeez M. copy of all the seized records. The demise of the Chartered Accountant in the year 2016 cannot be a reason for not auditing the books of account for assessment year 2009-2010. Therefore, there was no reasonable cause as mandated u/s 273B of the I.T.Act for deletion of the penalty imposed u/s 271B for assessment year 2009-2010. It is ordered accordingly.
7.2 In the result, the appeal for assessment year 2009-2010 is dismissed.
To sum up, the appeal for assessment year 2008-2009 is allowed and for assessment year 2009-2010 is dismissed. Order pronounced on this 08th day of August, 2019.
Sd/- Sd/- (Chandra Poojari) (George George K.) ACCOUNTANT MEMBER JUDICIAL MEMBER
Cochin ; Dated : 08th August, 2019. Devdas*
Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. The CIT(A)-III, Kochi. 4. The CIT (Central) Kochi. 5. DR, ITAT, Cochin 6. Guard file.
BY ORDER,
(Asstt. Registrar) ITAT, Cochin