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Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI D.S. SUNDER SINGH
आदेश /O R D E R
PER N.R.S. GANESAN, JUDICIAL MEMBER:
This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals) -5, Chennai, dated 10.03.2016 and pertains to assessment year 2011-12, confirming the penalty levied by the Assessing Officer under Section 271B of the Income-tax Act, 1961 (in short 'the Act').
Shri D. Anand, the Ld.counsel for the assessee, submitted that the assessee is engaged in the business of sale of tarpaulin in the name and style of M/s Rain Seal Tarpauline, Chennai. The assessee is also doing the same business in the name and style of M/s Rajkamal Enterprise. Due to sickness of the assessee’s father, the assessee could not concentrate on the business. Since the assessee’s father was reluctant to take allopathic treatment, ayurvedic treatment was given to him at home. Due to this, there was delay in finalization of accounts. According to the Ld. counsel, even though due date for filing the audit report was on 30.09.2011, in fact, the audit report was obtained only on 17.01.2013.
Admittedly, on the very same day, the assessee filed the return of income along with the audit report. The assessment order also passed under Section 143(3) of the Act on 31.03.2014 accepting the return filed by the assessee. Therefore, according to the Ld. counsel, there is no impediment for the Assessing Officer to complete the assessment. In fact, the audit report was very much available before the Assessing Officer when the return was taken up. Hence, according to the Ld. counsel, there was reasonable cause on the part of the assessee for not furnishing audit report within the due date provided under the Act. Therefore, according to the Ld. counsel, the levy of penalty is not justified.
On the contrary, Shri A.V. Sreekanth, the Ld. Departmental Representative, submitted that it was for the assessee to obtain the audit report on or before 30.09.2011 and file the same along with return of income within the due date. Admittedly, according to the Ld. D.R., the audit report was not obtained, therefore, the Assessing Officer has rightly levied penalty under Section 271B of the Act.
We have considered the rival submissions on either side and perused the relevant material available on record. Admittedly, the date for filing of audit report was 30.09.2011. The assessee claims that his father was taking ayurvedic treatment, therefore, he could not concentrate on the business of the assessee. This fact was not controverted by the Department. It is natural that when the father was taking treatment and reluctant to take allopathic medicines, the assessee being the son, could not concentrate on the business.
Therefore, this Tribunal is of the considered opinion that there is a reasonable cause on the part of the assessee for not finalizing the account within the due date provided under the Act. However, admittedly, the assessee obtained the audit report on 17.01.2013 and the same was also filed before the Assessing Officer along with return on 17.01.2013. In fact, the assessment under Section 143(3) of the Act was completed on 31.03.2014 without any addition. In other words, the return was accepted by the Assessing Officer. In those circumstances, as rightly submitted by the Ld.counsel for the assessee, there was no impediment for the Assessing Officer to complete the assessment. The very object of filing the audit report along with the return of income is only to assist the Assessing Officer to determine the correct taxable income. Therefore, this Tribunal is of the considered opinion that levy of penalty under Section 271B of the Act is not justified. Accordingly, the orders of the authorities below are set aside and the penalty levied by the Assessing Officer is deleted.
In the result, the appeal of the assessee is allowed.
Order pronounced on 23rd November, 2016 at Chennai.