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Income Tax Appellate Tribunal, “D”, BENCH KOLKATA
Before: SHRI A. T. VARKEY, JM & DR. A.L. SAINI, AM
सुनवाई क� तार�ख / Date of Hearing : 16/07/2018 घोषणा क� तार�ख/Date of Pronouncement: 10/10/2018 आदेश / O R D E R Per Dr. A. L. Saini, AM:
The captioned appeal filed by the assessee, pertaining to Assessment Year 2012-13, is directed against the order passed by the ld. Commissioner of Income Tax (Appeals)-6, Kolkata, in Appeal No.161/CIT(A)-6/Kol/2015-16 dated 12.05.2017, which in turn arises out of a penalty order passed by the Assessing Officer u/s 271B of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’).
2. The grievances raised by the assessee are as follows: “1. That imposition of penalty u/s 271B is bad in law as audit report was obtained before due date and there is no requirement of furnishing the same as per the circular relied by CIT(A) in his own order.
That ld. CIT(A) has been legally amiss to confirm the penalty u/s 271B on the ground of late submission of return and to erroneously infer that audit report was not obtained before due date.
2 Kulateghari Ketera S.K.U.S. Ltd. Assessment Year: 2012-13 3. That appellant reserves right to raise additional ground during the hearing.”
The brief facts qua the issue are that the assessee filed his return of income on 23.03.2013 electronically disclosing income at Rs. Nil. The due date for submission of return of income, as per provision of section 139(1) of the I.T. Act was on 30.09.2012, for the assessment year under consideration, whereas the assessee had filed its return of income on 23.03.2013. Hence, the assessee had filed its return of income belatedly for about 6 Months. During the assessment proceedings, the Assessing Officer noted that section 44AB of the Act casts responsibility on the assessee to get his account audited if the turnover exceeds Rs.40 lakh. For the Assessment Year 2012-12, the specific due date was 30.09.2012 for filing tax audit report. However, the Assessing Officer noted that assessee had failed to furnish audited report in prescribed proforma of Form No.3CB and Form No.3CD of the I.T. Rules by 30.09.2012. Therefore, penalty proceedings u/s 271B of the Act was initiated by the Assessing Officer and the Assessing Officer imposed the penalty u/s 271B of the Act to the tune of Rs.51,140/-.
Aggrieved by the stand so taken by the Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A) who has confirmed the penalty u/s 271B of the Act. Aggrieved by the order of the ld. CIT(A), the assessee is in appeal before us.
The ld. Counsel for the assessee has submitted before us that assessee has got tax audit report on 27.09.2012, which was within the due date i.e. 30.09.2012. However, the income tax return was filed and submitted on 23.03.2013 i.e. the income tax return was filed belated by the assessee. The assessing officer has initiated penalty us/ 271B of the Act stating that tax audit report u/s 44AB was filed after due date and, therefore, levied penalty @ 0.5% of gross receipts which comes to the tune of Rs.51,140/-. The ld. Counsel for the assessee has submitted that the assessee had obtained tax audit report from CA before due date of filing
3 Kulateghari Ketera S.K.U.S. Ltd. Assessment Year: 2012-13 the return of income but it was filed late. The ld. Counsel for the assessee also stated that section 44AB of the Act clearly states that the assessee is required to get his accounts audited by an accountant before the specified date and furnish the said report in the prescribed form. In the assessee`s case under consideration the tax audit report was ready before 30.09.2012 therefore, penalty under section 271B of the Act should not be levied.
On the other hand, the ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer which we have already noted in our earlier para and is not being repeated for the sake of brevity.
We have given a careful consideration to the rival submissions and perused the materials available on record, we note that Assessing Officer vide Para 8 of the assessment order, held as follows:
“8. Moreover, copy of Audit Report reveals that it was claimed to have done on 27.09.2012. This is a crystal clear fact that had the audit been completed within the stipulated period, it [copy] could have been submitted before the A.O as token of proof of completion of audit. But it was not done. Late submission of return proves that the assessee had prepared the audit report after the stipulated period. Hence, penalty proceeding u/s 271B attracts and initiated.”
We note that Assessing Officer himself admitted that the audit report reveals that assessee get the audit report done on 27.09.2012. Therefore, we note that audit had been completed in the assessee’s case under consideration before 30.09.2012, however, the assessee had filed return of income belated on 23.03.2013. To file the return of income belated does not mean that the assessee had not got the accounts audited before 30.09.2012.
We note that section 44AB of the Act refers to a person carrying on business where the total sales turnover or gross receipts, in business, exceeds Rs.40 lakhs ( threshold limit for A.Y. 2012-13). Hence, it is undisputed fact that the assessee get the tax audited done under section 44AB of the Act, in respect of his
4 Kulateghari Ketera S.K.U.S. Ltd. Assessment Year: 2012-13 transaction on or before the due date, i.e. on 30.09.2012. At this juncture, it is appropriate to quote the provisions of section 271B of the Income Tax Act, which are as follows:
Section 271B: Failure to get accounts audited. If any person fails to get his accounts audited in respect of any previous year or years relevant to an assessment year or furnish a report of such audit as required under s. 44AB, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum equal to one-half per cent of the total sales, turnover or gross receipts, as the case may be, in business, or of the gross receipts in profession, in such previous year or years or a sum of one hundred fifty thousand rupees, whichever is less.
We may draw the conclusion from the plain language of section 271B of the Act, mentioned above, that there can be two circumstances, where penalty can be imposed:
(1) If any person fails to get his accounts audited in respect of any previous. (2) Fails to furnish a report of such audit as required under section 44AB.
From the facts narrated above, none of the circumstances applies to the assessee under consideration. The assessee under consideration gets the accounts audited on or before 30.09.2012 and submitted before the assessing officer during the assessment proceedings, therefore, the first circumstance does not apply to the assessee. The assessee has furnished the tax audit report before the due date of filing return of income under section 139(1) read with section 44AB of the Act, that is, the tax audit report was ready before the due date, therefore, the second circumstance does not apply to the assessee. Hence, the penalty under section 271B should not be imposed on the assessee.
We note that for the Assessment Year 2012-13, there was no any requirement to submit the tax audit report along with the return of income. However, the amendment came w.e.f. Assessment Year 2014-15, where the assessee should file the tax audit report along with return of income. In the assessee’s case under 5 Kulateghari Ketera S.K.U.S. Ltd. Assessment Year: 2012-13 consideration, the assessee has obtained tax audit report before the specified date i.e. 30.09.2012 and furnished tax audit report during the course of assessment proceedings, therefore, the assessee has satisfied the twin objects of section 44AB of the Act, hence, penalty should not be imposed. Hence, we delete the penalty u/s 271B of the Act.
In the result, the appeal filed by the assessee, is allowed.
Order pronounced in the open court on this 10/10/2018. Sd/- Sd/- (A. T. Varkey) (A. L. Saini) �या�यक सद�य/ JUDICIAL MEMBER लेखा सद�य / ACCOUNTANT MEMBER कोलकाता /Kolkata; Dated: 10/10/2018 RS, Sr. PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : अपीलाथ� / The Appellant- Kulateghari Ketera S.K.U.S. Ltd. 1. ��यथ� / The Respondent.- ACIT, Circle-23, Hooghly 2. आयकर आयु�त(अपील) / The CIT(A), 3. आयकर आयु�त / CIT 4. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, कोलकाता / DR, 5. ITAT, Kolkata गाड� फाईल / Guard file. 6.