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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR.
Before: DR. M. L. MEENA & SH. ANIKESH BANERJEE
ORDER Per:Anikesh Banerjee, JM: The instant appeal of the assessee was filed against the order of the ld. Commissioner of Income Tax (Appeals)-5, Ludhiana,[in brevity the ‘CIT (A)’],order passed u/s 250 (6) of the Income Tax Act 1961, [in brevity ‘the Act’] for A.Y. 2017-18. The impugned order was emanated from the order of theNFAC, u/s 271 B of the Act.
2 Assessment Year: 2017-18 2. Brief fact of the case is that the assessee was liable to tax audit u/s 44AB of the Act in the impugned assessment year. The assessee claimed that the audit report was drawn on dated 03.09.2017. But the report was furnished before revenue on dated 24.01.2018. The due date for filing the tax audit report before department was dated 07.11.2017. Due to delay in filing report the ld. AO levied penalty u/s 274 r.w.s. 271B amount to Rs.86140/-. Aggrieved assessee filed an appeal before the ld. CIT(A) and submitted the detailsreasons. But the assessee was unsuccessful before the ld. CIT(A). Being aggrieved, the assessee filed an appeal before us.
The ld. AR filed a written submission which is kept in the record. The ld. AR first invited our attention in order of the ld. CIT(A) page no. 4 where the assessee filed a rebuttal. The relevant paragraph 4 is reproduced as below: “- Rebuttal by the Assessee • It has already been stated by the assessee before the AO that although the accounts were audited on 30.09.2017 but the tax audit report in Form No 3CB and 3CD were uploaded on 24.01.2018 i.e along with the return of income and this fact has not been disputed by the AO.
• The only default of the assessee is that the Audit Report has not been uploaded by the tax auditor before the specified date
3 Assessment Year: 2017-18 for filing of return of income and this is only due to the reason that there is change in the tax auditor and the counsel dealing with the tax matter.
• In view of the above stated facts the assessee was under bonafide belief that Tax Audit Report has been uploaded by the Tax Auditor since he had already audited the books of account within the time prescribed under section 44AB. The above stated bonafide belief of the assessee amounts to sufficient cause as provided u/s 273B of the Act. It is most humbly prayed, the penalty-imposed u/s 271B of the Act may kindly be deleted and appeal be decided.”
The ld. AR further placed that only reasons of delay in filing tax audit report was the change of auditor. In the impugned assessment year, the assessee changed the auditor and under due impression the audit report was filed within due date. The ld.AR further argued that the delay in filing the said report only for this impugned assessment year not in another assessment year. The ld. AR submitted a chart which is reproduced as below: -
4 Assessment Year: 2017-18 Sr. A.Y. Due Date of filing of Date of filing of Tax No. Tax audit report audit report 1. 2016-17 17-10-2016 06-10-2016 2017-18 31-10-2017 24-01-2018 2. 3. 2018-19 31-10-2018 29-10-2018 4. 2019-20 31-10-2019 31-10-2019 4.1 The ld. AR further argued and relied on the order of the ITAT Guwahati Bench in the case of North Eastern Constructions vs. ITO [2020] 117 taxmann.com 321 (Guwahati Trib.)/ 183 ITD 348 (Guwahati Trib). The relevant paragraph 12 is reproduced as below: “12. Moreover, we note that the assessee had furnished the TAR belatedly on 31-03-2016 along with the return of income, which has been accepted by the department and intimation u/s. 143(1) of the Act has been issued. Pursuant to the show cause notice before imposing penalty, the assessee had explained before the AO the cause for delay in filing the TAR. The assessee explained that delay happened due to the fact that for earlier year [i.e. AY 2014-15] the audit report could not be completed on time and could be completed only on 23-03-2016. This happened because the accountant of the assessee, who used to handle the accounts had suddenly left the office/service in earlier year without properly handing over the books maintained by the assessee. We are of the opinion that the 5 Assessment Year: 2017-18 explanation given by the assessee cannot be held to be unreasonable. We note that in a similar case, where facts and circumstances of the case was same, the Ahmedabad Bench of this Tribunal in the case of Kamlesh R. Agarwal (HUF) (supra) has given relief to the assessee by holding that delay in getting accounts of the earlier year can be reasonable ground as stipulated u/s. 273B of the Act. Therefore, we find that there was reasonable cause for not filing the TAR within due date. Moreover, we also note that there have been several mistakes which has crept in the impugned penalty order of the AO, which shows total non- application of mind of necessary facts by the AO. Therefore, from any angle as discussed supra, the penalty levied u/s. 27IB cannot be sustained, so it needs to be deleted and we direct the AO to do so.”
The ld. DR vehemently argued and fully relied on the order of the revenue authority. 6. We heard the rival submission and considered the documents available in the record. The assessee has placed the reasonable cause for delay in submission of the tax audit report u/s 44AB before the revenue authority. The assessee further produced that the delay, only for this impugned assessment year, not in any other assessment years. The assessee is not a habitual defaulter for filing the tax audit report. Therefore, the change of auditor is one of the valid reasons for delay in 6 Assessment Year: 2017-18 filing the tax audit report. In our considered view, there is a sufficient reason for delay in submitting the tax audit report before the authority. Accordingly, the penalty u/s 271B amount of Rs.86,140/- is liable to be deleted. 7. In the result, the appeal of the assessee bearing is allowed.
Order pronounced in the open court on 11.07.2023