DINESH PARAMSUKH TAVAR,AKKALKUWA vs. COMMISIONER OF INCOME TAX (APPEALS), DELHI

The brief facts of the case are that, the assessee is engaged in the business and has filed the return of income for the A.Y. 2017-18 on 30.01.2018 disclosing a total income of Rs.

At the time of hearing, the Ld.AR submitted that the CIT(A) has erred in confirming the action of the A.O in levying the penalty, overlooking the facts, reasonable cause and explanations submitted in the penalty proceedings. The Ld.AR submitted that the delay in obtaining and filing the audit report u/sec44AB of the Act was neither deliberate nor a wanton Act, but due to circumstances beyond the control of the assessee and also there is no mala fide intention of the assessee to delay in filling the Tax Audit report. The Ld.AR emphasized that the Tax Audit report was made available before the completion of assessment The Ld.AR substantiated the submissions with factual paper book and the judicial decisions and prayed for allowing the appeal. Per Contra, the Ld.DR relied on the order of the CIT(A).

We heard the rival submissions and perused the material on record. The sole matrix of the disputed issue envisaged by the Ld.AR that the CIT(A) has erred in confirming the action of the A.O in levying the penalty Dinesh Paramsukh Tavar ignoring the submissions and reasonable cause explained in the proceedings. Whereas books of account are audited u/sec44AB of the Act after due date u/sec 139(1) of the act i.e tax audit report u/sec44AB of the Act was obtained on 13.01.2018 beyond the extended due date u/sec139(1) of the Act of 7.11.2017 and uploaded the report on 30.01.2018 along with the return of income filed. Further the delay in obtaining and filing the audit report u/sec44AB of the Act was neither deliberate nor a wanton Act, but due to circumstances beyond the control of the assessee and also there is no mala fide intention of the assessee to delay in filling the Tax Audit report. The Ld.AR mentioned that the Tax Audit report was made available before the completion of assessment. The Ld.AR emphasized that due to death of assesses father on 16.01.2016, the assessee took some time to regularized the business operations in the previous year and also difficulty of availability of accountant in the village and the circumstances prevented the assesse to file the audit report within time limit prescribed under the Act. We find the Hon’ble Tribunal in ITA No. 411/Coch/2018 in the case of M/s Johns Biwheelers Vs ACIT for the A.Y 2013-14 has dealt on the similar issue of delay in obtaining and filling the Tax Audit Report U/sec44AB of the Act and deleted the penalty at Para7 to 8 of the order which is read as under:

We have heard the rival submissions and perused the record. In this case, the assessee was required to get his books of account audited and filed along with the return of income u/s. 44AB within the due date of 30/09/2013 for the assessment year 2013-14. However, the audit report was furnished only on 28/03/2014. The contention of the Ld. AR was that the delay in filing the return of income was due to damage to computer system due to virus infection which is a reasonable cause as prescribed u/s. 273B of the I.T. Act. The Ld. AR relied on the following judgments in support of his contentions: i) CIT vs. Malayalam Plantations Ltd. (1976) (103 ITR

1 From the material available on record, we are of the view that the assessee got his books of accounts audited on 28/03/2014 which was made available to the Assessing Officer and no prejudice has been caused to the Revenue. Now the short question that arises is whether in this scenario, penalty u/s. 271B of the Act can be levied or not. In our considered opinion, the assessee had only committed technical venial breach which does not create any loss to the exchequer as the audit report was available to the Assessing Officer before the completion of the assessment proceedings. The Madras High Court in the case of CIT vs. A.N. Arunachalam (208 ITR 481) in the context of filing of audit report for claiming deduction u/s. 80J of the Act, observed that once audit report has been made available before the Ld. Assessing Officer before the completion of assessment proceedings, the assessee should be granted deduction u/s. 80J of the Act. We observe that this judgment was rendered in the context of adjudication of quantum of deduction claimed by the assessee. Hence, the said analogy can very well be drawn and used in the penalty proceedings like that of the assessee. To sum up, we hold that the assessee had committed only technical venial breach for which he cannot be penalized. In view of the above, we are inclined to delete the penalty made by the assessee u/s. 271B of the Act.

In the result, the appeal of the assessee is allowed”

We considering the facts, circumstances and the ratio of the judicial decisions enumerated in the course of hearing find that there exist reasonable cause envisaged under the provisions of section 273B of the Act. The Ld.AR substantiated the submissions in support of reasonable cause for filling the Tax Audit report u/sec44AB of the Act with the delay, and the default committed in not filling the Tax Audit report before the due date u/sec139(1) of the Act is without any malafide intentions on the part of the assessee. Accordingly, we set aside the order of the CIT(A) and direct the Assessing officer to delete the penalty. And we allow the grounds of appeal in favour of the assesse.

In the result, the appeal filed by the assessee is allowed.

The Pr. CIT concerned. 4. तिभागीय प्रतितिति, आयकर अिीिीय अतिकरण, “A” बेंच, पुणे/ DR, ITAT, “A” Bench, Pune. गार्डफ़ाइि / Guard File 5. ////