BHARAT MIRPURI,CHENNAI vs. ITO NON CORPORATE CIRCLE 9 (1), CHENNAI

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ITA 833/CHNY/2018Status: DisposedITAT Chennai12 September 2018AY 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 the audit report is mandatory, the time limit is discretionary. Since the audit report was available before the assessment was completed and there was no impediment in determining taxable income, levying penalty was not justified.

What were the facts?

The assessee filed the audit report belatedly. The Assessing Officer levied a penalty under Section 271B of the Income-tax Act, which was confirmed by the CIT(Appeals).

What were the issues?

Whether penalty under Section 271B is leviable for belated filing of the audit report when the report was available before 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 N.R.S. GANESAN & SHRI A. MOHAN ALANKAMONY

For Respondent: Shri R. Clement Ramesh Kumar, JCIT
Hearing: 14.08.2018Pronounced: 12.09.2018

आदेश /O R D E R

PER N.R.S. GANESAN, JUDICIAL MEMBER:

1.

This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals) -10, Chennai, dated 21.12.2017, for the assessment year 2013-14, confirming the penalty levied by the Assessing Officer under Section 271B of the Income-tax Act, 1961 (in short 'the Act').

2.

We heard Shri Ananddevkumar, the Ld. representative for the assessee and Shri R. Clement Ramesh Kumar, the Ld. Departmental Representative. Admittedly, the audit report was filed belatedly before the Assessing Officer. Even though it is mandatory for the assessee to file the audit report, the time limit for filing the same is discretionary. The object of filing the audit report is to assist the Assessing Officer in completing the assessment for determination of taxable income. Since there was no impediment in determining the taxable income, and the audit report was very much available before the Assessing Officer before completion of assessment, this Tribunal is of the considered opinion that it is not a fit case for levy of penalty under Section 271B of the Act.

3.

The assessee also claimed before the CIT(Appeals) that he was sick and there was some delay in getting the audit report also.

This claim of the assessee was rejected by the CIT(Appeals) on the ground that the assessee was able to manage the business.

Managing the business is one thing and getting audit report is another thing. For auditing the accounts, the assessee has to instruct his auditor. Therefore, that cannot be a reason for levying penalty. In view of the above, this Tribunal is unable to uphold the order of the CIT(Appeals). Accordingly, orders of both the authorities below are set aside and the penalty levied by the Assessing Officer under Section 271B of the Act is deleted.

4.

In the result, the appeal filed by the assessee is allowed.

Order pronounced in the court on 12th September, 2018 at Chennai.

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