Anil Popatrao Boraste,, Nashik v. Income-tax Officer,,

ITA 1851/PUN/2013 | 2009-2010
Pronouncement Date: 29-04-2015 | Result: Allowed

Appeal Details

RSA Number 185124514 RSA 2013
Assessee PAN ABMPB1385N
Bench Pune
Appeal Number ITA 1851/PUN/2013
Duration Of Justice 1 year(s) 6 month(s) 18 day(s)
Appellant Anil Popatrao Boraste,, Nashik
Respondent Income-tax Officer,,
Appeal Type Income Tax Appeal
Pronouncement Date 29-04-2015
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 29-04-2015
Date Of Final Hearing 09-04-2015
Next Hearing Date 09-04-2015
Assessment Year 2009-2010
Appeal Filed On 11-10-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE: SHRI R.K. PANDA ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY JUDICIAL MEMBER ITA NO. 1851 /PN/201 3 ASSESSMENT YEAR : 20 09 - 10 ANIL POPATRAO BORASTE 6 SHARDA CO-OP. SOCIETY GANGAPUR ROAD NASHIK-05 VS. INCOME TAX OFFICER WARD 1(1) NASHIK (APPELLANT) (RESPONDENT) PAN NO. ABMPB1385N REVENUE BY: SHRI B.C. MALAKAR ASSESSEE BY: SHRI PRAMOD SHINGTE DATE OF HEARING : 09-04-2015 DATE OF PRONOUNC EMENT : 29-04-2015 ORDER PER VIKAS AWASTHY JM:- THE APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE OR DER OF COMMISSIONER OF INCOME TAX (APPEALS)-I NASHIK DATED 06-0 9-2013 FOR THE ASSESSMENT YEAR 2009-10 UPHOLDING THE LEVY OF PENALT Y U/S. 271B OF THE INCOME TAX ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2. THE BRIEF FACTS OF THE CASE ARE : THE ASSESSEE IS AN INDIVIDUAL AND IS AN ELECTRICAL CONTRACTOR. THE ASSESSEE IS ALSO HAVING AGR ICULTURE INCOME AND INCOME FROM INTEREST. THE ASSESSEE FILED ITS RETURN O F INCOME FOR THE ASSESSMENT YEAR 2009-10 ON 16-01-2010 DECLARING TOTAL INCOME OF RS.5 40 860/- AND AGRICULTURAL INCOME OF RS.72 500/-. THE CAS E OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE U/S. 143(2) WAS ISSUED TO THE ASSESSEE ON 18-08-2010. DURING THE ASSESSMENT YE AR UNDER CONSIDERATION THE ASSESSEE DECLARED TURNOVER OF RS.2 29 31 682/-. 2 ITA NO. 1851/PN/2013 A.Y. 2009-10 SINCE THE GROSS TURNOVER OF THE ASSESSEE WAS MORE THA N RS.40 LAKHS THE ACCOUNTS OF ASSESSEE WERE SUBJECT TO AUDIT UNDER THE PROVISIONS OF SECTION 44AB OF THE ACT. THE ASSESSEE RECEIVED THE AUD IT REPORT ON 02- 01-2010. THE ASSESSING OFFICER WHILE PASSING THE ASSESSMEN T ORDER OBSERVED THAT THE ASSESSEE SHOULD HAVE GOT HIS ACCOUN TS AUDITED BEFORE THE SPECIFIED DATE I.E. 31-10-2009 WHEREAS THE AUDIT REPOR T FILED BY THE ASSESSEE IS SIGNED BY THE AUDITOR ON 02-01-2010. THE ASSESSEE HAS VIOLATED THE PROVISIONS OF SECTION 44AB OF THE ACT. THE AS SESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S. 271B. HOWEVER THE RET URN OF INCOME FILED BY THE ASSESSEE WAS ACCEPTED WITHOUT MAKING ANY AD DITION OR DISALLOWANCE. THE ASSESSING OFFICER VIDE ORDER DATED 29-06-2012 LEVIED PENALTY OF RS.1 14 658/- FOR NON-FILING OF AUDIT REPORT WITHIN THE DUE D ATE. AGGRIEVED BY THE ORDER LEVYING PENALTY U/S. 271B THE ASS ESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) VIDE IMPUGNED ORDER RE JECTED THE REASONS GIVEN BY THE ASSESSEE FOR DELAYED FILING OF AUDIT R EPORT AND DISMISSED THE APPEAL OF THE ASSESSEE. THE ASSESSEE HAS NOW COME IN SECOND APPEAL BEFORE THE TRIBUNAL IMPUGNING THE FINDINGS OF T HE FIRST APPELLATE AUTHORITY. 3. SHRI PRAMOD SHINGTE APPEARING ON BEHALF OF THE ASSESS EE SUBMITTED THAT THERE WAS DELAY IN FILING OF THE AUDIT REPOR T AS THE ACCOUNTS OF THE IMMEDIATE PRECEDING FINANCIAL YEAR WERE NO T FINALIZED. UNTIL AND UNLESS THE ACCOUNTS OF THE PRECEDING YEARS ARE FINALIZED THE BALANCES CANNOT BE CARRIED FORWARD TO THE SUBSEQUENT Y EAR AND IN THE ABSENCE OF OPENING BALANCES THE ACCOUNTS FOR THE RELEVAN T PERIOD COULD NOT BE DRAWN. THE LEARNED AUTHORIZED REPRESENTATIVE (A R) FURTHER CONTENDED THAT THE ASSESSMENT YEAR UNDER CONSIDERATIO N IS THE FIRST YEAR 3 ITA NO. 1851/PN/2013 A.Y. 2009-10 WHERE THE TURNOVER OF THE ASSESSEE EXCEEDED RS.40 LAKH S AND THUS THE ACCOUNTS OF THE ASSESSEE WERE SUBJECT TO AUDIT U/S. 44 AB FOR THE FIRST TIME. THE LD. AR FURTHER CONTENDED THAT THE RETURN O F INCOME FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR UNDER CONSIDERAT ION WAS ACCEPTED WITHOUT MAKING ANY ADDITION IN SCRUTINY ASSESSMENT. THE LD. AR FURTH ER POINTED OUT THAT ONE OF THE CONTRIBUTORY FACTOR CAUSING DELAY IN FILING OF THE AUDIT REPORT WAS CHANGE OF AUDITORS. INITIALLY THE AS SESSEE APPOINTED ONE CHARTERED ACCOUNTANT FIRM TO CONDUCT AUD IT U/S. 44AB OF THE ACT BUT DUE TO DELAY IN FINALIZATION OF ACCOUNTS THE S AID AUDITORS ACCEPTED OTHER ASSIGNMENTS. BY THE TIME ASSESSEE APPR OACHED THE AUDITORS THE STATUTORY LIMIT OF MAXIMUM AUDITS THAT CAN BE UNDERTAKEN BY A CHARTERED ACCOUNTANT FIRM WAS OVER. HENCE THE AS SESSEE HAD TO APPROACH ANOTHER CHARTERED ACCOUNTANT TO GET HIS ACC OUNTS AUDITED AND OBTAIN AUDIT REPORT IN THE PRESCRIBED FORM. THE LD. AR S UBMITTED THAT THE DELAY IN FILING OF AUDIT REPORT WAS DUE TO BONAFIDE REASO NS AND BEYOND THE CONTROL OF ASSESSEE. THE LD. AR IN ORDER TO SUPPORT HIS CONTENTIONS PLACED RELIANCE ON THE FOLLOWING DECISIONS: I. ACIT VS. KAMLESH R. AGARWAL (HUF) 99 ITD 27 (AHD.) (TM). II. ITO VS. ARUN KUMAR BHUWALKA 40 ITD 373 (CAL.). III. VAMANA APPANNA & SONS VS. ACIT 58 TTJ (HYD.) 696. IV. INDIAN HANDLOOM TEXTILES VS. ITO 68 ITD 560 4. ON THE OTHER HAND SHRI B.C. MALAKAR REPRESENTING THE DEPARTMENT VEHEMENTLY SUPPORTED THE IMPUGNED ORDER AND PRAYED FO R DISMISSING THE APPEAL OF THE ASSESSEE. THE LD. DR CONTENDED THAT FILING O F THE AUDIT REPORT AFTER THE DATE SPECIFIED U/S. 44AB ATTRACTS PENALT Y U/S. 271B. THE AUDIT REPORT FILED BY THE ASSESSEE IS DATED 02-01-2 010 WHICH IS MUCH AFTER THE DUE DATE I.E. 31-10-2009. FURTHER THERE IS NO MATERIAL 4 ITA NO. 1851/PN/2013 A.Y. 2009-10 ON RECORD TO SUGGEST THAT THE DELAY WAS CAUSED DUE T O CHANGE OF THE AUDITORS. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF BOTH THE SIDES AND HAVE PERUSED THE ORDERS OF THE AUT HORITIES BELOW. WE HAVE ALSO EXAMINED THE DECISIONS ON WHICH THE LD. AR HAS PLACED RELIANCE. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAS FILED HIS RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR ALONG WITH THE AUDIT REPORT AFTER THE DUE DATE AS SPECIFIED U/S. 44AB OF THE ACT. IT IS ALSO NOT DISPUTED THAT ON THE BASIS OF THE AUDIT REPORT ASSESSME NT U/S. 143(3) WAS DONE. NO ADDITION OR DISALLOWANCE WAS MADE IN THE RETURN OF INC OME FILED BY THE ASSESSEE. THE ASSESSEE HAS GIVEN REASONS FO R THE DELAY IN FILING OF THE AUDIT REPORT BEYOND THE DUE DATE. THE REAS ONS CITED BY THE ASSESSEE FOR DELAY IN FILING OF THE AUDIT REPORT ARE : THE ACCOUNTS OF THE PREVIOUS FINANCIAL YEAR WERE NOT FINALIZE D. UNTIL AND UNLESS THE ACCOUNTS OF THE PRECEDING YEAR ARE FINALIZED THE BALANCES COULD NOT BE CARRIED FORWARD TO THE SUBSEQUENT YEA R. THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION WAS THE FIRST YEAR WHEN THE TURNOVER OF T HE ASSESSEE EXCEEDED RS.40 LAKHS AND THE ACCOUNTS OF THE ASSESSEE WERE REQUIRED TO BE AUDITED IN COMPLIANCE OF PROVISIONS OF SECTIO N 44AB. IN THE ABSENCE OF OPENING BALANCES ACCOUNTS COU LD NOT HAVE BEEN PREPARED AND AUDITED. THE ASSESSEE APPROACHED THE CHARTERED ACCOUNTANT FOR AUDIT OF ACCOUNTS SINCE THERE WAS DELAY IN FINALIZATION OF ACCOUNTS T HE CHARTERED ACCOUNTANT ACCEPTED SOME OTHER ASSIGNMENT. THE STATUTORY LIMIT OF MAXIMUM NUMBER OF AUDITS THAT A FIRM OF CHARTERED ACCOUNTANTS COULD UNDERTAKE WAS EXHAUSTED. THE 5 ITA NO. 1851/PN/2013 A.Y. 2009-10 ASSESSEE WAS CONSTRAINED TO APPROACH ANOTHER FIRM OF CH ARTERED ACCOUNTANTS WHICH CONSUMED LOT OF TIME. 6. A BARE PERUSAL OF SECTION 273B WOULD SHOW THAT NO PE NALTY U/S. 271B SHALL BE IMPOSED IF THE ASSESSEE IS ABLE TO PROVE REA SONABLE CAUSE FOR THE FAILURE TO COMPLY WITH THE PROVISIONS OF THE RELEVANT SECTION. 7. THE REVENUE HAS NOT DISPUTED THE DELAY IN FINALIZATION O F ACCOUNTS OF THE IMMEDIATE PRECEDING YEAR. DUE TO NON-FINALIZATION OF A CCOUNTS OF IMMEDIATE PRECEDING YEAR THERE WAS DELAY IN PREPARING ACC OUNTS AND OBTAINING TAX AUDIT REPORT IN THE IMPUGNED ASSESSMENT YE AR. IN THE CASE OF VAMANA APPANNA & SONS VS. ACIT (SUPRA) THE DELAY IN FINALIZING OF ACCOUNTS AND OBTAINING OF AUDIT REPORT FOR THE IMMED IATE PRECEDING YEAR IS HELD TO BE A SUFFICIENT CAUSE FOR THE DELAY IN OBTAIN ING TAX AUDIT REPORT IN SUBSEQUENT ASSESSMENT YEAR. THE PENALTY LEV IED U/S. 271B WAS ACCORDINGLY DELETED. SIMILAR VIEW HAS BEEN TAKEN IN TH E CASE OF ACIT VS. KAMLESH R. AGARWAL (HUF) (SUPRA) FOR DELETING THE PENALTY U/S. 271B OF THE ACT. 8. WE FURTHER OBSERVE THAT THE LD. AR WHO HAD REPRESE NTED THE ASSESSEE BEFORE THE CIT(A) HAS ADMITTED THE FACT THAT TH E ASSESSEE HAD FIRST APPROACHED THEM TO CARRY OUT AUDIT U/S. 44AB OF TH E ACT. THE ASSESSEE WAS CONSTRAINED TO APPROACH SOME OTHER AUDIT ORS AS THEY HAD ALREADY EXHAUSTED THE STATUTORY LIMIT OF MAXIMUM AUDITS. T HE RELEVANT EXTRACT OF THE SUBMISSIONS ARE REPRODUCE HERE-IN-BELOW: WE MAY ADD HERE THAT INITIALLY OUR FIRM WAS APPOINTED BY HIM TO CARRY OUT THE AUDIT U/S. 44AB OF THE ACT. BUT LATER DUE TO DELAY IN GETTING HIS FINAL ACCOUNTS WE ACCEPTED OTHER ASSIGN MENT AND WHEN HE CAM EO US FOR AUDITING HIS ACCOUNTS OUR STATUTORY LIMIT OF MAXIMUM AUDITS THAT CAN BE UNDERTAKEN BY A C.A. WAS OVE R AND HENCE WE COULD NOT CONDUCT THE AUDIT OF HIS ACCOUNTS THOUGH INITIALLY 6 ITA NO. 1851/PN/2013 A.Y. 2009-10 WE ACCEPTED THE SAME. THEREFORE THE APPELLANT HAS TO APPROACH ANOTHER CHARTERED ACCOUNTANT WHICH ALSO CONSUMED LOT OF TIME. IN SUCH CIRCUMSTANCES AND ON TOTALITY OF THE FACTS OF T HE CASE THERE WAS REASONABLE CAUSE WITHIN THE MEANING OF SECTION 271 B OF THE ACT. 9. IN VIEW OF THE FACTS OF THE CASE WE ARE OF THE OPINION THAT THE ASSESSEE HAS BEEN ABLE TO SHOW BONAFIDE CAUSE FOR DELAY IN FILING THE AUDIT REPORT. THE ASSESSEE HAS DISCHARGED HIS ONUS TO PROVE REASONABLE CAUSE U/S. 273B OF THE ACT. THEREFORE NO PENALTY U/S. 27 1B IS LEVIABLE ON THE ASSESSEE. 10. IN THE RESULT THE IMPUGNED ORDER IS SET-ASIDE AND THE APPEAL O F THE ASSESSE IS ALLOWED. ORDER PRONOUNCED ON WEDNESDAY THE 29 TH DAY OF APRIL 2015 AT PUNE SD/- SD/- (R.K. PANDA) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE DATED: 29 TH APRIL 2015 RK/PS COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT(A) - I NASHIK 4 THE CIT - I NASHIK 5 6 THE DR ITAT B BENCH PUNE. GUARD FILE. //TRUE COPY// BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE