JAMDEV TRADERS LLP,CHENNAI vs. ITO NON CORPORATE WARD 13(3), CHENNAI

The brief facts of the case is that the Assessee firm filed its return of income for the assessment year 2014 – 2015 on 3rd March, 2015 declaring an income as ‘Nil’. In the penalty order, the Assessing Officer has noted that the gross receipts during the year is Rs.25,04,45,878/-. As per the provisions of Section 44AB, every person who is carrying on a business shall, if his total sales turnover or gross receipts exceeds Rs.1.00 crore should get his accounts of the previous year audited by an Accountant before the specified date and furnish the same by that date, the report of such audit in the prescribed form duly signed and verified by such an Accountant and setting forth such particulars as may be prescribed. The specified date in relation to the assessment year means 30th September of the assessment year. The Assessee is required to get his accounts audited and file the tax audit report electronically before 30th September, 2014. The Assessee had filed the return of income as well as the tax audited report belatedly on 30th March, 2015. As no tax audit report was filed belatedly or before the due date, a notice u/s.271B dated 22.12.2016 was issued asking the Assessee to show-cause as to why the penalty u/s.271B should not 3 -: be levied for the failure to submit the tax audit report in the prescribed form as required u/s.44AB before the due date.

We have heard both the sides, perused the materials available on record and gone through the orders of the authorities below.

We find that the audit report was not uploaded due to technical difficulties of uploading. Therefore, the Assessing Officer is not justified, rejected the explanations of the Assessee and levied penalty u/s.271B of the Income Tax Act, 1961. However, by considering the detailed explanation given by the Assessee which is extracted in the Penalty Order, Para–3, we are of the opinion that there is a reasonable cause for the Assessee for not uploading the 4 -: audit report and therefore under the above facts and circumstances of the case, no penalty can be levied. Therefore, the order passed by the Assessing Officer and confirmed by the learned Commissioner of Income Tax (Appeals) is cancelled and the appeal filed by the Assessee is allowed.

In the result, the appeal of the Assessee in I.T.A.No.3118/Chny/2018 is allowed.