M.SHANMUGAM,SALEM vs. ITO WARD 2(1), SALEM

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ITA 3505/CHNY/2018Status: DisposedITAT Chennai19 September 2019AY 2013-143 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that while filing an audit report is mandatory, the time limit for filing is discretionary. Since the audit report was available before the assessment was completed, the penalty under Section 271B was not warranted.

What were the facts?

The assessee's appeal concerns the levy of penalty under Section 271B for the assessment year 2013-14. The delay in filing the audit report was attributed to a survey conducted in the previous year and the subsequent difficulty in obtaining the assessee's statement.

What were the issues?

Whether penalty under Section 271B is leviable when the audit report is filed with a delay but before the completion of assessment.

Which sections of the Income-tax Act were involved?

Section 271B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘ C’ BENCH : CHENNAI

Before: SHRI GEORGE MATHAN & SHRI RAMIT KOCHAR

आदेश / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER

1.

This is an appeal filed by the assessee against the order of the Commissioner of Income-tax (Appeals),Salem in Appeal No.33/2017- 18 dated 24.10.2018 for the assessment year 2013-14 confirming levy of penalty u/s.271B of the Act.

2.

Shri S.Sridhar represented on behalf of the Assessee and Shri J.Pavitran Kumar represented on behalf of the Revenue.

3.

It was submitted by the ld.AR that there was a survey in the premises of assessee on 22.10.2012 due to which there was a delay in finalizing of the accounts of earlier years. As the own statement recorded in the course of survey was not available with the assessee and the same had to be obtained from Assessing Officer, it was submitted that the return for the assessment year 2012-13 came to be filed on 20.07.2013. For the assessment year, 2013-14, the return was filed only on 12.03.2014 after obtaining Audit Report. It was submitted that under similar circumstances in the case of assessee”s wife, Smt.S.Thilaikkarasi, the Co-ordinate Bench of this Tribunal vide order dated 30.04.2019 in for assessment year 2013-14 had cancelled the penalty levied u/s.271B of the Act.

4.

In reply, the ld.DR vehemently supported the Orders of Assessing Officer and the ld.CIT(A).

5.

We have heard the rival contentions and perused the material available on record. We have also perused the order of Co-ordinate Bench of this Tribunal in the case of assessee”s wife, Smt.S.Thilaikkarasi referred to supra. It is noticed that the Co-ordinate Bench of the Tribunal has held as follows:-

“The very object of filing of audit report is to assist the Assessing Officer to complete the assessment and levy tax. In this case, the audit report was admittedly filed on 13.03.2014 and the assessment was completed on 30.12.2016. Therefore, the audit report was very much available before the Assessing Officer on the date of assessment order. Therefore, there is no impediment on the part of the assessee in completing the assessment by the Assessing 3 Officer. Hence, this Tribunal is of the considered opinion that the levy of penalty under Section 271B of the Act is not called for. It is well settled principle of law that filing of audit report is mandatory but the time limit is only discretionary. In view of the above, this Tribunal is unable to uphold the orders of the lower authorities. Accordingly, orders of both the authorities below are set aside and the penalty levied under Section 271B of the Act is deleted. 5. In the result, the appeal filed by the assessee is allowed.” As it is noticed that the issue raised in assessee’s appeal is identical to the facts decided by the Co-ordinate Bench of this Tribunal in assessee’s wife appeal referred to supra, respectfully following the decision of Co-ordinate Bench of Chennai Tribunal referred to supra, the penalty u/s.271B of the Act as levied by the Assessing Officer and confirmed by the ld.CIT(A) stands deleted.

6.

In the result, the appeal of assessee is allowed. Order pronounced in the open court after conclusion of hearing on 19th September, 2019, at Chennai.

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