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Income Tax Appellate Tribunal, DELHI BENCH “D”: NEW DELHI
Before: SHRI AMIT SHUKLA & SHRI PRASHANT MAHARISHI
INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “D”: NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA No. 2399/Del/2015 (Assessment Year: 1992-93) Ramesh Kumar Jain, Vs. ITO, Prop M/s. R.K. Trading Co., Railway Road, Baraut, Civil Lines, Bijnor Baghpat PAN: AFNPJ3757M (Appellant) (Respondent)
Assessee by : None Revenue by: Shri Amit Jain, Sr. DR Date of Hearing 26/07/2018 Date of pronouncement 05/10/2018
O R D E R PER PRASHANT MAHARISHI, A. M.
This appeal is filed by the assessee against the order of the ld CIT (A), Meerut dated 28.03.2014 for Assessment Year 1992-93 wherein, penalty levied u/s 271B of the Act of Rs. 28420/- is confirmed. This is the only grievance in this appeal. 2. The assessee has raised the following grounds of appeal:- (1) That the order as passed by the authorities below is arbitrary, unjust and illegal, because the learned authorities below have erred in law as well as in facts in passing the orders. (2) That the Learned C.I.T. (A) has not considered the facts and circumstances of the case to condone the delay and case laws as referred. The assessee has shifted his business at Page | 1
civil lines, Bijnore during the F.Y. 1992-93 and it is not clear, as the order as passed by the ITO on Dt. 26.05.95 and sent by post on Dt. 30.05.95 at the old address was ever served to the assessee, as there is no evidence on the file. However the assessee has presumed, after 16 years and when the notice U/s 221 was received, that the order may have been served, which may have been handed over to the counsel. But the order was also not traced our with the counsel. So the certified copy of the order and other papers were asked from the department and the appeal was filed, with the application for condonation of delay to cooperate the department and to avoid more litigation, which was not accepted. It was not believed that notice U/s 221(1) was not served previously, without any facts, evidence, and/or material on record. Also the following case laws as referred was not considered as under:- “(1) Collector Land Acquisition & Ors V/s Mrs. Katiji & Ors. (1987 AIR 1353 S.C.) (2) N. Balakrishna V/s M. Krishnamurty (1998 AIR 3222 S.C.) (3) State of U.P. V/s Khalil (1996 AIHC 89 Alld. H.C.) (4) C.P. Enterprises V/s CTT Luck now (2006) 3 VLJ 53 Alld. H.C. (5) M/s Indian Packaging GBD V/s Trade Tax Tribunal (2006) 30 NTN 359(Alld. H.C.) (6) Sahroj Akhtar V/s Commissioner of S.Tax U.P. (2003) 22 NTN 322 (Alld. H.C.)
(7) Sangram Singh V/s Electric Tribunal Kotah (1955 AIR S.C. 425) (8) Commissioner of Sales Tax U.P. V/s Kukeraja Papers Ltd. (2004) 25 NTN 1040 (Alld. H.C.) (9) Vijay Kumar Ruia V/s CIT 242 CTR 292 (Alld. H.C.) (3) That on merits also, the learned CIT(A) has not considered the Ground No. 2 of the appeal memo and along with the ITO has also not considered the provisions of Sec. 44AB as applicable for the A.Y. 1992- 93 and the case law as referred and duly mentioned in the penalty order. (4) That without prejudice to above, the penalty as imposed is illegal, time barred, and very excessive.” 3. The brief facts of the case is that the assessee is an individual engaged in sale and purchase of bidi, who filed his return of income on 04.01.1993 declaring total income of Rs. 28790/-. Intimation u/s 143(1) (a) was issued on 26.08.1993. Later on the ld AO noted that the assessee has shown turnover of Rs. 5684138/- and audit report as required u/s 44AB of the Act are not filed within the due date. However, he noted that along with the return of income filed on 04.01.1993, the tax audit report along with audited accounts was filed. The ld AO noted that as audited report has been filed with the belated return the assessee has exposed himself to penalty u/s 271B of the Act. Consequently, on 22.11.1994 the show cause notice was issued to the assessee. The assessee furnished its reply on 16.12.1994 stating that tax audit report was obtained on 30.10.1992 before the specified date, but the report was filed along with the Page | 3
return of income. There was only condition to obtain that report by the specified due date. Therefore, according the assessee there was no default in complying with the provision of section 44AB of the Act. The ld AO rejected explanation of the assessee and stated that assessee should have filed the tax audit report within the specified time. Therefore, penalty u/s 271B of the Act was levied of Rs. 28420/- vide order dated 26.05.1995. 4. The assessee aggrieved with the same preferred appeal before the ld CIT(A) contesting that order u/s 271B of the Act was passed on 26.05.1995 was beyond the stipulated period of six months from the end of the assessment year in which penalty proceedings were initiated. Further, the assessee has already filed the tax audit report along with report on income and it was obtained in prescribed time. The ld CIT (A) rejected the explanation of the assessee and confirmed the penalty levied by the ld AO, therefore, assessee is in appeal before us. 5. Despite notice none appeared on behalf of assessee, therefore, the issue is decided on the merits of the case as per information available on record. 6. The ld Sr DR , Shri Amit Jain, vehemently supported the orders of the lower authorities. 7. We have carefully considered the rival contentions and perused the orders of the lower authorities. The assessment year involved in this appeal is 1992-93 and according to the relevant provision of section 271B of the Act at that time it was provided that if any person a. fails to get his account audited in respect of any previous year or
b. obtained a report of such audit as required u/s 44AB of the Act or c. furnished the said report along with his return of income, then such person shall pay by way of penalty @ 0.5% of the total sales. Admittedly, in this case, the tax audit report was obtained by the assessee on or before the due date of filing of the report. Therefore, it cannot be said that the assessee has failed to obtain the tax audit report before the due date. It is merely that such tax audit report was furnished along with belated return of income. In view of the above that the assessee has already obtained the tax audit report before the specified date for filing of return of income which is 31.10.1992, there is no default by the assessee which can be subjected to penalty u/s 271B of the Act. Accordingly, we reverse the finding of the lower authorities and direct the ld AO to delete the penalty of Rs. 28420/- levied u/s 271B of the Act. 8. In the result, appeal filed by the assessee is allowed. Order pronounced in the open court on 05/10/2018. -Sd/- -Sd/- (AMIT SHUKLA) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 05/10/2018 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT Page | 5
ASSISTANT REGISTRAR ITAT, New Delhi