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Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI GEORGE MATHAN & SHRI INTURI RAMA RAO
O R D E R
PER GEORGE MATHAN, JUDICIAL MEMBER:
This is an appeal filed by the Assessee against the order of the learned Commissioner of Income Tax (Appeals)-19, Chennai in dated 10.01.2019 for the Assessment Year 2013-14 against the levy of penalty u/s.271B of the Income Tax Act, 1961.
Mr. N. Quadir Hoseyn, Advocate represented on behalf of the Assessee and Mr. A. Sundararajan, Additional CIT represented on behalf of the Revenue.
It was submitted by the learned Authorized Representative that the assessee is in the business of body building on the chassis for buses and trucks. It was a submission that there was a search on the premises of the assessee on 11.11.2010. It was a submission that because of the search there was substantial difficulties in getting the accounts properly audited for the Assessment Years 2009-10 and 2010-11. It was a submission that consequently the audit report for the assessment year 2012-13 also was delayed and filed on 24.03.2014, though the due date for the same was 30.09.2012. It was a submission that no penalty u/s.271B had been levied for the assessment year 2012-13. It was a submission that for the assessment year 2013-14, being the assessment year under appeal, the due date for filing the audit report was 30.09.2013. However, the same was filed only on 11.11.2010, thereby having a delay of nearly fifteen months. It was a submission that as the assessee had to get the audit report for the immediately preceding assessment year completed first and only then the current assessment year could be done, which had caused the delay. It was a submission that for the immediately preceding assessment year, the audit report had been filed in March 2014 and within the period of seven months the audit report for the current year has also been filed. It was a prayer that the reasonable cause may be accepted and the penalty deleted.
In reply, the learned Departmental Representative submitted that the learned CIT(A) has relied upon the decision of the Hon’ble Kerala High Court
3 -: in the case of Metro Agencies, wherein even a three months delay had not been condoned. It was a submission that in the assessee’s case there was a delay of more than fifteen months. It was a submission that the penalty was liable to be confirmed.
We have considered the rival submissions and perused the materials available on record.
A perusal of the order of the learned CIT(A) clearly shows that the learned CIT(A) has relied upon the decision of the Hon’ble Kerala High Court in the case of Metro Agencies as also the decision of the Co-ordinate Bench of this Tribunal, Bangalore Benches in the case of Lalanath Reddy vs. Assistant Commissioner of Income Tax, Bangalore to confirm the penalty levied u/s.271B of the Income Tax Act, 1961. A perusal of both the decisions clearly shows that the penalty that has been levied there was on the ground that no material was produced by the assessee to substantiate the cause shown by it in those cases. In the present case, it is clearly an undisputed fact that the audit report for the immediately preceding assessment year has been filed only on 24.03.2014. It is also clearly an undisputed fact that no penalty has been levied for the assessment year 2012-13 where when the audit report should have been filed on 30.09.2012 but it was filed on 24.03.2014, thereby having a delay of nearly sixteen months which has also been tacitly condoned by the Assessing Officer. In view of the fact non-levy of penalty u/s.271B of the Act for 2012-13, there is 4 -: no reason to hold that the reasonable cause shown by the assessee on both the counts being first the search on the assessee that has disrupted the accounts and the availability of books for those years and secondly which has caused the delay in filing the audit report for the subsequent assessment years was unreasonable. In fact, for the relevant assessment year, the assessee has filed the audit report within seven months from the date of filing of the audit report for the immediately preceding assessment year.
This being so, we are of the view that the assessee has proved his claim of reasonable cause. Consequently, the penalty as levied by the Assessing Officer and as confirmed by the learned CIT(A) u/s.271B of the Act stands deleted.
In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 8th January, 2020 in Chennai.