DHANAPAL GIRIDHARAN,CHENNAI vs. ITO NON CORPORATE WARD 9(3), CHENNAI

Both the appeals filed by the assessee are delayed by three days in filing the appeal before the Tribunal. The assessee filed petitions for condonation of delay in filing the appeals in the form of an affidavit by stating that the delay was neither wilful not wanton and pleaded for condoning the delay, against which, the ld. DR has not raised any serious objection. Since the assessee was prevented by reasonable cause, the delays in filing the appeals before the Tribunal are condoned and admitted the appeals for adjudication.

Brief facts of the case are that the assessee has filed his return of income for the assessment year 2013-14 and 2015-16 electronically on 23.09.2013 and 24.10.2015 with turnover of ₹.6,81,68,267/- and ₹.9,51,31,568/- respectively being more than ₹.1 crore. The assessee is, thus, covered by the provisions of section 44AB of the Act and required to file the return of income along with audit report of accounts in 3CB Form on or before the due date of filing of return under section 139(1) of the Act. Since the assessee has failed to comply with the provisions of section 44AB of the Act, the Assessing Officer levied penalty under section 271B of the Act for both the assessment years. On appeal, the ld. CIT(A) confirmed the penalty levied under section 271B of the Act for both the assessment years.

On being aggrieved, the assessee is in appeal before the Tribunal. None appeared on behalf of the assessee despite various opportunities afforded from 16.01.2019. Hence, we proceed to decide the appeals on merits after hearing the ld. DR.

We have heard the ld. DR, perused the materials available on record and gone through the orders of authorities below. In this case, since the assessee has not filed the audit report of accounts in 3CB Form on or before the due date under section 139(1) of the Act, the Assessing Officer show-caused the assessee as to why penalty under section 271B of the act should not be levied for failure to comply with the provisions of section 44AB of the Act. In reply to the show-cause notice, it was the submissions of the assessee that his accounts were audited by the auditor within the prescribed time and copy was furnished before the Assessing Officer. He further states that the auditor informed him that he had been uploading the report in the income tax website every year and states that due to this, he was under bonafide belief that the auditor had been uploading the tax audit report. However, the Assessing Officer levied the penalty under section 271B of the Act. On appeal, the ld. CIT(A) confirmed the penalty levied under section 271B of the Act for both the assessment years.

The case of the Department is that the assessee has not furnished the tax audit report on or before the due date of filing of return of income under section 139(1) of the Act and therefore, levy of penalty under section 271B of the Act is warranted. The case of the assessee is that the assessee has got audited his accounts by the auditor within the prescribed time and copies were also furnished before the Assessing Officer. On perusal of the orders of authorities below, we find that it is the case of the assessee that tax audit report under section 44AB of the Act was not filed before the due date of filing the same, but it was filed belatedly. Moreover, it is also not the case of the assessee that the accounts were not audited by the auditor within the prescribed time. The tax audit report was obtained well within the stipulated due date apart from mentioning of the same in the returns filed by the assessee. Considering the explanations that the assessee was prevented by reasonable cause for the delay in filing the tax audit report under section 44AB of the Act, we are of the considered opinion that the penalty levied under section 271B of the Act is liable to be deleted. Accordingly, the penalty levied of ₹.1,50,000/- under section 271B of the Act is deleted for both the assessment years.

In the result, both the appeals filed by the assessee are allowed. Order pronounced on the 26th August, 2022 in Chennai.