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Income Tax Appellate Tribunal, PUNE BENCH, ‘B’ PUNE
Before: SHRI R.S. SYAL & SHRI PARTHA SARATHI CHAUDHURY
आदेश / ORDER
PER R.S. SYAL, VP :
This appeal by the assessee is directed against the order
passed by the CIT(A)-2, Pune on 30-07-2020 confirming the
penalty of Rs.1,50,000/- imposed by the Assessing Officer (AO)
u/s.271B of the Income-tax Act, 1961 (hereinafter also called ‘the
Act’) in relation to the assessment year 2015-16.
This appeal is time barred by 06 days. The ld. AR has
attributed the reason of delay due to Covid-19 pandemic.
Therefore, the said delay is condoned and the instant appeal is
2 ITA No.592/PUN/2020 M/s. R.R. Kapoor
admitted for disposal on merits by virtue of judgment of the
Hon’ble Supreme Court in Cognizance for Extension of
Limitation, In re 438 ITR 296 (SC) read with judgment in
Cognizance for Extension of Limitation, In re 432 ITR 206 (SC)
dated 08-03-2021 and 421 ITR 314.
Briefly stated, the facts of the case are that the assessee
furnished his return on 30-03-2016 declaring total income of
Rs.8,56,050/-. Such return was accompanied by the tax audit
report. The AO observed that the audit u/s.44AB was not carried
out before the “specified date”, namely, 31-10-2015 and hence,
the assessee was liable to be visited with penalty u/s.271B of the
Act. On being called upon to explain the reasons for the delay,
the assessee submitted that audit of the books of account for the
immediately preceding year was carried out by M/s. S.M.R. For
the year under consideration, the new auditor was appointed for
conducting the audit on 22-08-2015. The new auditor called for
objections, if any, to its appointment from the earlier auditor, who
raised certain issues. Eventually, the issues were resolved and
immediately thereafter the incumbent auditor undertook the audit
work and completed the same, followed by the filing of the return
3 ITA No.592/PUN/2020 M/s. R.R. Kapoor
along with the tax audit report. Not convinced, the AO imposed
penalty of Rs.1,50,000/- u/s.271B of the Act. The ld. CIT(A)
echoed the penalty, against which the assessee has come up in
appeal before the Tribunal.
After considering the rival submissions and going through
the relevant material on record, it is observed that the assessee
admittedly got the accounts audited beyond the due date u/s
139(1) of the Act, which was the reason for late filing of the audit
report with the Department. Section 271B in such circumstances
calls for imposition of the penalty. However, it is pertinent to
note that section 271B is subject to section 273B, and the latter
section emphasizes that if a “reasonable cause” is established for
non-compliance of the requirements which led to imposition of
penalty under certain sections, including 271B, then no penalty
should be imposed. We are confronted with a situation in which
there was a change of the auditor from the preceding year. The
new auditor, as per the established procedure, sought a no
objection from the earlier auditor, who raised certain objections.
Those issues were resolved later on, which led to the delay in the
audit of the accounts of the assessee. As and when the issues got
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resolved, the audit work was taken up and completed followed by
the filing of tax audit report and the income-tax return. In our
considered opinion, such reasons for the delay constitute a
reasonable cause for the late auditing of the accounts and of
furnishing the audit report belatedly. In the hue of section 273B
r.w.s.271B, we hold that the ld. CIT(A) ought not to have
confirmed the penalty. We, therefore, set aside the impugned
order and direct to delete the penalty.
In the result, the appeal is allowed. Order pronounced in the Open Court on 15th June, 2022.
Sd/- Sd/- (PARTHA SARATHI CHAUDHURY) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; िदनांक Dated : 15th June, 2022 सतीश आदेश की �ितिलिप अ�ेिषत/Copy of the Order is forwarded to: अपीलाथ� / The Appellant; 1. ��थ� / The Respondent 2. 3. The CIT(A)-2, Pune 4. The Pr.CIT-2, Pune 5. DR, ITAT, ‘B’ Bench, Pune गाड� फाईल / Guard file. 6.
आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune
ITA No.592/PUN/2020 M/s. R.R. Kapoor
Date 1. Draft dictated on 15-06-2022 Sr.PS 2. Draft placed before author 15-06-2022 Sr.PS 3. Draft proposed & placed before JM the second member 4. Draft discussed/approved by JM Second Member. 5. Approved Draft comes to the Sr.PS Sr.PS/PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *