SHRI NARENDRA L. JAIN,AHMEDABAD vs. THE INCOME TAX OFFICER, WARD-6(5), NOW WARD- 2(2)(3), AHMEDABAD

PDF · subscribers
ITA 2098/AHD/2015Status: DisposedITAT Ahmedabad14 November 2017AY 2011-123 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee was prevented by a reasonable and sufficient cause from getting the accounts audited on time because he did not have possession of the books of accounts. Therefore, the penalty levied was not justified.

What were the facts?

The assessee was levied a penalty for not getting his accounts audited by the due date as required under Section 44AB. The assessee contended that he was prevented by reasonable cause as the business was transferred to him and the books of the previous proprietor were not in his possession until after the due date.

What were the issues?

Whether the assessee had a reasonable cause for not complying with the audit requirement under Section 44AB, and if so, whether penalty under Section 271B was leviable.

Which sections of the Income-tax Act were involved?

Section 44AB,Section 271B,Section 273B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “B” BENCH

Before: SHRI N.K. BILLAIYA & SHRI S. S. GODARA

For Appellant: Shri Sunil Talati, AR

PER N.K. BILLAIYA, ACCOUNTANT MEMBER:

1.

This appeal by the Assessee is preferred against the order of the Ld. CIT(A)-10, Ahmedabad dated 01.06.2015 pertaining to A.Y. 2011-12.

ITA No. 2098/Ahd/2015 2 . A.Y. 2011-12 2. The assessee is aggrieved by the levy of penalty of Rs. 1.50 lakhs u/s. 271B of the Act.

3.

A perusal of the penalty order shows that the A.O. has levied the penalty u/s. 271B of the Act because he was of the opinion that the assessee has violated the provisions of Section 44AB of the Act by not getting his accounts audited on or before the due date prescribed under the relevant provisions of the Act.

4.

When the matter was agitated before the ld. CIT(A), the assessee strongly contended that he was prevented by reasonable and sufficient cause for not getting the accounts audited on or before the due date. The reasons given by the assessee did not find any favour with the First Appellate Authority who confirmed the penalty order.

5.

Before us, the ld. counsel for the assessee reiterated what has been stated before the lower authorities.

6.

The ld. D.R. supported the findings of the ld. CIT(A).

7.

We have given a thoughtful consideration to the orders of the authorities below. We have also very carefully considered the factual matrix which prevented the assessee by getting the accounts audited on or before the due date.

8.

Facts show that the business Aadinath Bulk Carriers was transferred to the assessee through a registered sale deed as a going concern vide a sale agreement on which Stamp duty was paid on 24.09.2010. We find that the books of the

ITA No. 2098/Ahd/2015 3 . A.Y. 2011-12 earlier proprietor were in possession of the transferor till the year 2012 which were audited much after the expiry of time limit prescribed for getting the accounts audited u/s. 44AB of the Act. The copy of the Audit Report was handed over to the assessee thereafter.

9.

After receiving the books of accounts from the erstwhile proprietor, the assessee could complete the books from the date when he became the proprietor and then could get the books of accounts audited.

10.

However, during this period, the due date for getting the books audited expired. In our considered opinion, on the given facts of the case, the assessee could not get the books audited on or before the due date as he was not in possession of the books and therefore was prevented by reasonable and sufficient cause as per the provisions of Section 273B of the Act.

11.

We are of the considered opinion, that on the given set of facts, this is not a fit case for the levy of penalty u/s. 273b of the Act. We, set aside the findings of the ld. CIT(A) and direct the A.O. to delete the penalty.

12.

In the result, the appeal filed by the Assessee is allowed.

Order pronounced in Open Court on 14- 11- 2017

Sd/- Sd/- (S. S. GODARA) (N. K. BILLAIYA) JUDICIAL MEMBER True Copy ACCOUNTANT MEMBER Ahmedabad: Dated 14/11/2017 Rajesh

More judgments on Section 44AB

All 2,486 judgments and leading authorities on Section 44AB →

Recent GST High Court judgments

Search GST case law →