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Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI SANJAY ARORA & SHRI GEORGE MATHAN
: अपीलाथ* क- ओर से/ Appellant by Mr.V.S.Jayakumar, Adv. +,यथ* क- ओर से /Respondent by : Ms.Ann Marry Baby, JCIT सुनवाई क- तार"ख/Date of Hearing : 11.09.2017 : 12.09.2017 घोषणा क- तार"ख /Date of Pronouncement आदेश / O R D E R
PER GEORGE MATHAN, JUDICIAL MEMBER:
the Order of Commissioner of Income Tax (Appeals), Puducherry, in dated 15.03.2016 for the AY 2011-12 against the confirmation of penalty u/s.271B of the IT Act, 1961.
ITA No.2833/Mds/2016 is an appeal filed by the assessee against the Order of Commissioner of Income Tax (Appeals), Puducherry, in ITA No.603/CIT(A)-PDY/2013-14(R) dated 19.07.2016 for the AY 2011-12 ITA Nos.1484 & 2833/Mds/2016 :- 2 -: against the dismissal of the rectification application in respect of penalty levied u/s.271B of the IT Act, 1961. 3. As the issues in both the appeals are inter-connected, common and relates to the same assessee, both are disposed of by this common order.
Ms.Ann Marry Baby, JCIT, represented on behalf of the Revenue and Shri V.S.Jayakumar, Adv. represented on behalf of the assessee.
It was submitted by the Ld.AR that the assessee is in the business of manufacturing and sale of wooden doors, windows and furniture and wholesale and retail sales of Log and sizes. It was a submission that there was a survey on the premises of the assessee on 16.09.2011. A statement was recorded from the assessee in respect of stock held by the assessee. It was a submission that the statement was not given to the assessee and consequently the assessee had made an application for the copy of the statement on 21.09.2011 along with challan for Rs.100/-. The Ld.AR drew our attention to Page Nos.2 & 3 of the Paper Book which is a copy of the requisition along with the challan. It was a submission that as the statement was not received, the assessee had filed a second letter along with the challan for another Rs.100/- on 26.11.2012 and the statement was given to the assessee on 27.11.2012. The copies of the requisition letters along with the challan were shown at Page Nos.4 & 5 of the Paper Book and the copies of the letter of the AO and statement were & 2833/Mds/2016 :- 3 -: shown at Page Nos.6 to 11 of the Paper Book. It was a submission that as the Auditor of the assessee had required copy of the statement recorded at the time of survey, the audit of the assessee was delayed. It was a submission that the due date for the Audit Report was 30.09.2011. However, the audit was done only on 21.05.2012 and was filed along with return on 31.05.2012. It was a submission that only on account of the delay in getting the copy of the statement recorded in the course of the survey, there was a delay in getting the accounts audited. It was a submission that as the statement recorded from the assessee was not available, the audit has been delayed and subsequently as it was getting substantial delayed, the assessee had requested the Auditor to complete the audit without the statement recorded, based on the books of accounts maintained by the assessee, which had been done. It was a submission that there was no delay in respect of the filing of the return and obtaining the Audit Report in any of the earlier years or in any of the subsequent years. It was a submission that the Audit Report was also available with the AO when completing the assessment and the delay was only on technical breach. It was a submission that on account of the delay in filing of the Audit Report, the AO had levied the penalty u/s.271B of the Act, which was also confirmed by the Ld.CIT(A). It was a submission that the Ld.CIT(A) did not accept the fact that the assessee had filed its first requisition on 21.09.2011. It was a submission that the Ld.CIT(A) had dismissed the assessee’s appeal by holding that the requisition was made only on 27.11.2012 which was much after filing of the return of income ITA Nos.1484 & 2833/Mds/2016 :- 4 -:
along with Audit Report and consequently the non-availability of the statement recorded in the course of the survey could not be considered as a reasonable cause. It was a submission that after the order of the Ld.CIT(A), a rectification application had been filed wherein the proof of submitting the application along with the challan on 21.09.2011 was produced before the Ld.CIT(A) in an application u/s.154 which was also rejected by the Ld.CIT(A) against which the appeal in had been filed. It was a submission that there was a reasonable cause for the delay in obtaining the Audit Report and filing the same with the return of income. It was a further submission that the delay was only a venial breach and not a contumacious conduct. It was a submission that the penalty as levied may be deleted.
In reply, the Ld.DR vehemently supported the order of the Ld.CIT(A). It was a submission that the assessee had filed the return on 31.05.2012 and the Audit Report is dated 21.05.2012 and the statement had been given to the assessee only on 27.11.2012. It was a submission that the non-availability of the statement recorded could not be considered as a reasonable cause for the delay in obtaining the Audit Report.
We have considered the rival submissions. A perusal of the statement recorded from the assessee in the course of the survey clearly shows that the statement of accounts of the assessee and his group & 2833/Mds/2016 :- 5 -: concerns were available in the computer in the course of the survey.
Further, in reply to Question No.7, there are defects in the computerized statement which have also been pointed out. The question regarding the stock has also been raised in the statement recorded. However, interestingly no stock has been taken in the course of the survey. The survey seems to be conducted in respect of certain land purchases done by the assessee, though, statements in respect of the assessee’s business and stock has also been raised. Admittedly, in statement recorded from the assessee it is incumbent that the copy of such statement be immediately granted to the assessee. Admittedly, the statement had not granted to the assessee till 27.11.2012. It is also an admitted fact that the assessee has made an application on 21.09.2011 and paid challan for Rs.100/- for the copy of the statement recorded. The Revenue is not disputing the receipt of the challan of Rs.100/- nor accompanying letter dated 21.09.2011. The Revenue has granted the copy of the statement recorded on the basis of the letter of the assessee dated 26.11.2012 though in the letter of the Revenue dated 27.11.2011, they talk of letter of the assessee received on 21.11.2012. The statement recorded from the assessee does talk of the P&L A/c, Balance Sheet of the assessee for the year ending 31.03.2011 and which also talks about the incomplete nature of the entry. The Auditor of the assessee wanting to see this statement cannot be found fault with. In any case, the Audit Report was also available with the AO when the assessment was completed. This being so, we are of the view that the assessee did have a reasonable & 2833/Mds/2016 :- 6 -: cause for the delay in obtaining and furnishing the Audit Report belatedly along with the return of income. In these circumstances, we are of the view that as the assessee has reasonable cause in view of the provisions of Sec.273B of the IT Act, 1961, no penalty u/s.271B is leviable on the assessee and we consequently cancel the penalty levied by the AO and as confirmed by the Ld.CIT(A).
In the result, the appeal of the assessee in stands allowed.
As we have already allowed the assessee’s appeal in and cancel the penalty levied u/s.271B, the appeal filed by the assessee in ITA No.2833/Mds/2016 becomes infructuous and is dismissed as infructuous.
In the result, the appeal filed by the assessee in stands allowed and the appeal of the assessee in ITA No.2833/Mds/2016 stands dismissed.
Order pronounced in the Open Court on September 12, 2017, at Chennai. (संजय अरोड़ा) (जॉज# माथन) (GEORGE MATHAN) (SANJAY ARORA) "या'यक सद"य/JUDICIAL MEMBER लेखा सद"य/ACCOUNTANT MEMBER & 2833/Mds/2016 :- 7 -: