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Income Tax Appellate Tribunal, DELHI BENCH: ‘G’ NEW DELHI
Before: SHRI G. D. AGRAWAL & MS SUCHITRA KAMBLE
This appeal is filed by the assessee against the order dated 27/01/2016 passed by CIT(A)-1V, Kanpur.
The grounds of appeal are as under:- 1. “The order of assessing officer is bad in law and against the facts of the case.
2. Penalty needs to be deleted as TAR & income tax return have been filed within time allowed by section 139 (1) of the Income Tax Act, 1961.
Although CIT (A) has deleted the penalty u/s 271B of the Income Tax Act, 1961 for assessment year 2005-06, 2007-08, 2008-09, 2009-10, 2010-11 2011-12 but his wrongly sustained penalty in assessment year 2006-07 on the ground that in Form No. 1 (which is online acknowledgement of Income Tax Return) it is not mentioned that Tax Audit Report was filed while in assessment year 2005-006 in Form No.1 (which is physically acknowledgment of ITR by Deptt.) it is mentioned the tax audit report was filed without appreciating the fact that format of Form No. 1 in above both assessment year were different.
In Form No. 1 in assessment year 2005-06 annexure were to be mentioned while in Form No. 1 in assessment year 2006-07 there are no such column & hence ‘A’ has not mentioned the fact of filing Tax Audit Report, However, during the assessment & appellant proceedings tax audit report etc. were filed mentioning date of its filing (Please refer page of 2 appellant order).
Form No. 1 in assessment year 2005-06 was to be filed physically but Form No. 1 in assessment year 2006-07 is a computerized generated.
Hence penalty needs to be deleted.
3. The above grounds are independent and without prejudice to one and another. The appellant also prays to add, amend, alter or forgo any of the grounds at any time before and during the course of hearing.”
A search operation u/s 132 of the Income Tax Act, 1961 was carried out on 09.09.2010 at the residential premises of director of Assessee and also in the premises of Assessee - M/s Swarn Overseas (P) Ltd. The Assessing Officer observed that the assessee was operating 5 bank accounts in which huge amounts was deposited on different dates & was also given details of banks with their account numbers along with amount involved totaling Rs. 1,86,08,975/-. The Assessment was completed on 31.03.2013 under Section 153A/144 and the Assessing Officer made addition of Rs. 1,86,08,935/-. In the meanwhile the Assessing Officer initiated penalty proceedings under Section 271B was processed as the Assessing Officer observed that as the gross receipts/credits in bank accounts exceeded the prescribed limit as per the provision of Section 44AB of the Income Tax Act, 1961, the assessee was liable to get its accounts audited. Therefore, the penalty at Rs.92,160 was imposed under Section 271B of the Act.
Being aggrieved by the Penalty order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.
The Ld. AR submitted that the Assessing Officer failed to notice that all the bank accounts mentioned by Assessing Officer was already reflected in the final a/c of the Assessee. The Assessing Officer has not bothered to look into accounts & final accounts and passed the order without any application of mind or going through in final accounts of the Assessee. The Assessing Officer calculated the amount at Rs. 1,84,32,992/- but failed to notice that this amount is included in turnover in Trading A/c and Profit & Loss a/c. Turnover as evidenced by trading a/c & tax audit report is Rs. 31,03,30,445/-. The Ld. AR further submitted that the Assessing Officer wrongly initiated action u/s 271B for levy of penalty and later on levies penalty. The Ld. AR submitted that the content of reply to so called ‘Show Cause Notice’ issued before levy of penalty u/s 271B mentioned by Assessing Officer is wrong.
The Ld. DR relied upon the penalty order and order of the CIT(A).
We have heard both the parties and perused the material available on record. It is pertinent to note that in all the other Assessment Years since 2005-06 to 2011-12 except for year under consideration, the CIT(A) has deleted the penalty. In-fact, the audit report was very much on record before the Assessing Officer therefore, provisions u/s 271B should have not been invoked by the Assessing Officer. It is also evident from the Assessment Order that the assessee has furnished Audited Balance Sheet from A.Ys. 2006-07 to 2011-12. In fact the assessee filed return on 28.11.2006 for A.Y. 2006-07 which is prior to due date of filing returns i.e. 30.11.2006. From the perusal of the Audit report the date can be seen that of 01.09.2006. Thus, the return along with Audit report was duly filed by the Assessee. This fact was overlooked by the Assessing Officer as well as the CIT(A). Therefore, the Assessing Officer as well as the CIT(A) was incorrect in imposing the penalty u/s 271B of the Act. The appeal of the assessee is allowed.
In result, the appeal of the assessee is allowed.
Order pronounced in the Open Court on 11th June, 2018.