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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI MAHAVIR SINGH, VICE- & SHRI G.MANJUNATHA
PER G.MANJUNATHA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is directed against the
order of the learned CIT(A)-1, Madurai dated 04.03.2019 and
pertain to assessment year 2013-14.
The assessee has raised the following grounds of appeal:
“1. The order of the Commissioner of Income Tax (Appeals) CIT(A) is bad and erroneous in law and against the principles of natural justice. 2. The learned CIT(A) erred in not considering the grounds of appeal and written submissions in proper perspective. 3.(a) The learned CIT (A) erred in not considering the materials that the very purpose of furnishing audit report, necessitating the determination of Income of the appellant had been fulfilled by the very reason that the same had been considered and accepted by
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the Assessing Officer even in the course of assessment proceedings. (b) The learned CIT (A) erred in not considering the fact that the delay, if at all any, was due to the delay in the audit of accounts of the appellant society under Tamil Nadu Co-operative Societies Act,1983, which was beyond the control of the appellant society. (c) The learned CIT(A) erred in not considering the delay in the initiation of the impugned penalty proceedings as late as in 2018, while the assessment was completed as early as in 09/03/2016.”
Brief facts of the case are that assessee has filed its return of
income for assessment year 2013-14 on 05.06.2014 admitting Nil
taxable income and such return was filed belatedly u/s.139(4) of the
Income Tax Act, 1961 (hereinafter referred to as “the Act”) . The
assessee has filed tax audit report as required to be furnished
u/s.44AB of the Act electronically on 14.05.2014. The assessment
for the impugned assessment year has been completed u/s.143(3) of the Act on 09.03.2016 and determined total income of `
36,493/- after making additions towards disallowance of
expenditure. Thereafter, the Assessing Officer has initiated penalty
proceedings u/s.271B of the Act for failure to file tax audit report as
required u/s.44AB of the Act for the impugned assessment year
within the due date specified under the Act and hence, called upon
the assessee to file necessary evidences as to why penalty shall
3 ITA No.1065/Chny/2019
not be levied for non-filing of tax audit report. In response, the
assessee submitted that although there was delay in filing of tax audit report u/s.44AB of the Act, but said return has been filed before completion of assessment and further, filing of compulsory
e-audit report was introduced for first time from assessment year 2013-14 and because of this there was technical glitch in e-portal provided for uploading tax audit report, which resulted in delay, but
said delay is neither intentional nor to derive any benefit and hence, there was no need to levy penalty u/s.271B of the Act. The Assessing Officer, however, not convinced with explanation furnished by the assesse and according to him, although assessee
claims that there was difficulty in filing electronic tax audit report, but such claim has not been substantiated with any evidences accordingly, levied a sum of `1,50,000/- penalty u/s.271B of the Act.
Being aggrieved by the assessment order, assessee preferred
an appeal before learned CIT(A). Before learned CIT(A), assessee has reiterated its submissions made before Assessing Officer for not filing tax audit report within the time allowed under the Act along
with certain judicial precedents and argued that assessee neither
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have any deliberate intention not to file tax audit report within the
time allowed nor derived any undue benefit by not filing the return
as required under the Act and hence, for delay in filing tax audit
report penalty u/s. 271B of the Act cannot be fastened on the
assesse, when assessee has explained reasons for not filing tax
audit report within due date allowed under the Act.
The learned CIT(A), after considering submissions of the
assessee observed that reasons given for not filing tax audit report
in time does not come under reasonable cause as provided
u/s.273B of the Act and hence, there is no error in the findings
recorded by Assessing Officer to levy penalty u/s.271B of the Act
for not filing tax audit report within the due date specified under the
Act. Being aggrieved by the learned CIT(A) order, assessee is in
appeal before us.
The learned AR for the assesse submitted that learned CIT(A)
has erred in confirming penalty levied u/s.271B of the Act without
appreciating the fact that delay in filing of tax audit report was due
to delay in audit of accounts of the society under Tamil Nadu Co-
operative Societies Act, 1983, which was beyond the control of the
5 ITA No.1065/Chny/2019
assesse. The learned AR further submitted that although, there is a
delay in filing tax audit report, but such return was filed before
completion of assessment and further requirement of e-filing of tax
audit report was introduced for the first time, from assessment year
2013-14 which has its own difficulties and during this transition
period a lenient view needs to be taken, when it comes to levy of
penalty for failure to file tax audit report as required u/s. 44AB of the
Act.
The learned DR, on the other hand, supporting order of learned
CIT(A) submitted that reasons given by the assessee that Accounts
Manager was forget to inform the computer operator to upload the
tax audit report in e-portal of the Department which leads to delay
does not come under the purview of reasonable cause as provided
u/s.273B of the Act and hence, learned CIT(A) was right in
confirming penalty levied u/s.271B of the Act.
We have heard both parties, perused the materials available
on record and gone through orders of authorities below. Admittedly,
there is a delay in filing audit report as required u/s.44AB of the Act
electronically in e-portal provided for this purpose. However, the said
audit report has been filed on 14.05.2014 much before completion of
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assessment order on 09.03.2016. The assessee has given reasons
for not filing audit report electronically before the due date specified
under the Act and according to the assesse, scheme of e-filing was
introduced for the first time from assessment year 2013-14 and due
to this assessee has faced difficulty in uploading audit report. We
have gone through reasons given by assessee for not filing audit
report electronically within time allowed under the Act for impugned
assessment year and find that since scheme of e-filing audit report
was introduced for the first time from assessment year 2013-14 and
e-portal provided by the Department for this purpose is having its
own difficulties, while levying penalty for belated filing of audit report,
a lenient view must be taken by the authorities considering initial
transition period, more particularly, when assessee has filed such
audit report electronically before completion of assessment
proceedings. In this case, on perusal of details filed by the assesse,
we find that although there is a delay in filing of audit report as
required u/s.44AB of the Act electronically, but such return has
been filed much before the date of completion of assessment
proceedings. Moreover, audit report as required to be obtained
u/s.44AB was obtained from auditors on 23.09.2013. Therefore,
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when audit report was obtained within due date, merely for delay
in filing audit report in e-portal of the Department cannot be
considered as deliberate attempt made by assessee for not filing
audit report so as to impose penalty u/s.271B of the Act . This view
is supported by the decision of ITAT., Ahmedabad in the case of
Harishbhai Babubhai Patel in ITA No.646/Ahd/2016, where the
Tribunal, after considering relevant facts has deleted penalty levied
by the Assessing Officer for non-submission of electronic audit
report within the due date allowed under the Act. Hence, we direct
the Assessing Officer to delete penalty levied under section 271B of
the Act for non-submission of audit report within due date allowed
under the Act.
In the result, appeal filed by assessee is allowed.
Order pronounced in the open court on 29th December, 2020
Sd/- Sd/- (महावीर �संह) ( जी. मंजुनाथ ) (Mahavir Singh) (G. Manjunatha ) उपा�य�/ Vice-President लेखा सद$य / Accountant Member चे&नई/Chennai, 'दनांक/Dated 29th December, 2020 DS आदेश क� ��त)ल*प अ+े*षत/Copy to: 1. Appellant 2. Respondent 3. आयकर आयु,त (अपील)/CIT(A) 4. आयकर आयु,त/CIT 5. *वभागीय ��त�न1ध/DR 6. गाड� फाईल/GF.