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Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: SHRI MANOJ KUMAR AGGARWAL & SHRI MANOMOHAN DAS
PER MANOMOHAN DAS, J.M: This appeal by the assessee is directed against the order of the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, [CIT(A)] dated 29-08-2023 relevant to the Assessment Year [AY] 2017-18. The Ld. CIT(A) has confirmed penalty as levied by Ld. A.O u/s. 271B of the Act.
ITA No.1201/Chny/2023 :- 2 -: 2. The brief facts of the case are that the assessee-company is
engaged in manufacturing of paper/ card board etc. During Financial
Year [FY] 2016-17 relevant to A.Y 2017-18, the assessee admitted
turnover of Rs.11,14,27,496/- and accordingly, the assessee was
required to get its accounts audited u/s. 44AB of the Income Tax Act
1961 (hereinafter “the Act”). However, the assessee filed its return of
income and the Audit Report belatedly. As the Audit Report was filed
belatedly, penalty proceedings u/s. 271B of the Act was initiated
against the assessee and ultimately a penalty of Rs. 1,50,000/- was
levied by Ld. A.O upon the assessee vide order dated 11.11.2021.
Being aggrieved, the assessee has filed 1st appeal before the ld. 3.
CIT(A). The ld. CIT(A) vide order dated 29-08-2023 dismissed the
appeal of the assessee.
Being aggrieved, the assessee filed the present appeal before
the Tribunal.
Heard the representatives of both the parties and perused the
materials on record.
The Ld. AR submitted that the audit u/s 44AB of the Act was
completed on 31-08-2017 but audit report was received on 22-02-2018
and the same was filed on same very date i.e., 22-02-2018 (The date
ITA No.1201/Chny/2023 :- 3 -: was 07-11-2017). The Ld. AR further submitted that the Chartered
Accountant was fully engaged in filing of ITR due to which he was not
able to deliver the audit report to the assessee in time and therefore,
the delay in filing of the audit report was beyond the control of the
assessee. The Ld. AR relied on certain decisions favoring the
assessee. On the other hand, the Ld. Sr. D.R supported the orders of
the lower authorities in levying the penalty.
We have carefully considered the submissions of both the
parties and also perused the materials as available on record. The ld.
CIT(A) observed that the assessee did not furnish any evidence
regarding the efforts made by him in getting the tax audit report early
from the Chartered Accountant. The Ld. CIT(A) further observed that
the assessee failed to demonstrate any reasonable ground of delay as
stipulated u/s. 271B of the Act. The ld. CIT(A) relied on the decisions
of Hon’ble Punjab & Haryana High Court in the cases of Kwality Skin
Co. vs. CIT [2001] 119 Taxman 876 , Hon’ble Kerala High Court in the
case of K. Ravindranath Nair vs. Dy. CIT [2009] 319 ITR 108 and
Hon’ble Rajasthan High Court in the case of Madhuban Chemicals &
Fertilizers Ltd. vs. CIT [2006] 157 Taxman 374 and dismissed the
appeal of the assessee. On the other hand, the assessee relied on
certain decisions of Hon’ble jurisdictional High Court and Tribunal. We
ITA No.1201/Chny/2023 :- 4 -: observe that this Tribunal in the case of Balaji Logistics vs. ACIT in ITA
No. 2248/Chny/2019 dated 07-09-2022, inter alia, held that once audit
report has been made available before the AO when the assessment
proceedings were completed, then there would be no reason for levy
of penalty u/s. 271B of the Act.
We find that the assessee has uploaded the audit report on 22-
02-2018 and the assessment was completed vide order dated 28-12-
2019. Thus, the assessee filed the audit report before the ld. AO prior
to completion of the assessment order and it had reasonable cause for
such delay. Accordingly, the cited decision of the Tribunal in the
aforesaid case of Balaji Logistics is applicable in the case of the
assessee.
The Hon’ble Madras High Court in the case of CIT vs. Apex
Laboratories Pvt. Ltd [2010] 320 ITR 498 (Mad), inter alia, held that no
penalty is imposable u/s 271B of the Act for non-compliance with the
provisions of Section 44AB of the Act on the ground that the returns
were filed belatedly. Penalty is leviable only if the assessee fails to get
his accounts audited and obtain a report.
Further, the Co-ordinate Bench of the Tribunal in the case of Sri
Ramunaicker Raja vs. ACIT dated 15-02-2013 under appeal No. ITA
ITA No.1201/Chny/2023 :- 5 -: 603/Chny/2022 decided the similar issue in favour of the assessee. The Co-ordinate Bench of the Tribunal considered the case of Balaji Logistics vs. ACIT and accordingly, decided this issue in favour of the assessee.
We, therefore, respectfully follow the aforesaid decisions, conclude that it is not a fit case for levy of penalty under section 271B of the Act. By deleting the same, we allow the appeal of the assessee.
In the result, the appeal filed by the assessee is allowed.
Order pronounced on 08th March, 2024.
Sd/- Sd/- (मनोमोहन दास) कुमार अ�वाल अ�वाल अ�वाल) अ�वाल (मनोज मनोज मनोज कुमार मनोज कुमार कुमार (Manomohan Das) (Manoj Kumar Aggarwal) �ाियक सद�/Judicial Member लेखा सद�य सद�य /Accountant Member लेखा सद�य सद�य लेखा लेखा चे�ई/Chennai, �दनांक/Dated: 08th March, 2024. EDN/- आदेश क� �ितिलिप अ�ेिषत/Copy to: 1. अपीलाथ*/Appellant 2. +,थ*/Respondent 3. आयकर आयु-/CIT 4. िवभागीय +ितिनिध/DR 5. गाड' फाईल/GF