Shivshankar Mallikarjunappa Bidwe(HUF), Latur v. ITO, Ward 3(3), Latur, Latur

ITA 328/PUN/2011 | 2006-2007
Pronouncement Date: 25-11-2014 | Result: Allowed

Appeal Details

RSA Number 32824514 RSA 2011
Assessee PAN AAEHS0309E
Bench Pune
Appeal Number ITA 328/PUN/2011
Duration Of Justice 3 year(s) 8 month(s) 8 day(s)
Appellant Shivshankar Mallikarjunappa Bidwe(HUF), Latur
Respondent ITO, Ward 3(3), Latur, Latur
Appeal Type Income Tax Appeal
Pronouncement Date 25-11-2014
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 25-11-2014
Date Of Final Hearing 13-11-2014
Next Hearing Date 13-11-2014
Assessment Year 2006-2007
Appeal Filed On 17-03-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE MS. SUSHMA CHOWLA JUDICIAL MEMBER AND SHRI R.K. PANDA ACCOUNTANT MEMBER ITA NO.328/PN/2011 (ASSESSMENT YEAR: 2006-07) SHIVSHANKAR MALLIKARJUNAPPA BIDWE (HUF) C/O S M BIDWE & CO. NANDED ROAD LATUR 413512 PAN: AAEHS0309E . APPELLANT VS. THE INCOME TAX OFFICER WARD 3(3) LATUR . RESPONDENT APPELLANT BY : SHRI M.K. KULKARNI ASSESSEE BY : SHRI B.C. MALAKAR DATE OF HEARING : 13-11-2014 DATE OF PRONOUNCEMENT : 25-11-2014 ORDER PER SUSHMA CHOWLA JM: THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) AURANGABAD DATED 14.01.2011 RELATING TO ASSESSMENT YEAR 2006-07 AGAINST PENALTY LEVIED UNDER SECTION 271B OF THE INCOME-TAX ACT . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE PENALTY U /S 271B OF RS.1 00 000/- LEVIED BY THE ASSESSING OFFICER ON ACCOUNT OF THE DEFAULT OF THE ASSESSEE BEING THE DE LAY IN GETTING THE ACCOUNTS AUDITED U/S 44AB OF THE INCOME TAX ACT 1961. 2. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE C ASE THE LEARNED CIT(A) IS NOT JUSTIFIED IN NOT ACCEPTING AS REASO NABLE CAUSE THE REASONS FOR THE DELAY AS STATED BY THE AS SESSEE IN GETTING THE ACCOUNTS AUDITED U/S 44AB AND IN CONF IRMING THE LEVY OF THE PENALTY U/S 271B. THE APPELLANT CRAVES LEAVES TO ADD ALTER AMEND OR DE LETE ANY OF THE ABOVE GROUNDS OF APPEAL AT THE TIME OF TH E HEARING OR BEFORE THAT. ITA NO.328/PN/2011 SHIVSHANKAR M BIDWE (HUF) 2 3. THE ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST THE LEVY OF PENALTY UNDER SECTION 271B OF THE ACT AT RS.1 00 000/-. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HU F WAS CARRYING ON THE BUSINESS IN WHICH THE TURNOVER EXCEEDED RS.40 00 000/- AND AS SUCH THE ASSESSEE WAS LIABLE FOR GET TING THE ACCOUNTS AUDITED UNDER SECTION 44AB OF THE ACT. THE AS SESSEE WAS ALSO REQUIRED TO FURNISH THE AUDIT REPORT IN FORM 3CB AND 3CD BEFORE THE ASSESSING OFFICER BY OR BEFORE DUE DATE OF FILING THE RET URN OF INCOME I.E. 31.10.2006. THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION THOUGH GOT THE ACCOUNTS AUDITED BUT THE AUDIT REPORT IN THE CASE WAS OBTAINED ON 16.12.2006 AND THE SAME WAS FILE D ON 15.03.2007. SINCE THE ASSESSEE HAD FAILED TO GET ITS ACC OUNTS AUDITED AS PER THE PROVISIONS OF SECTION 44AB OF THE ACT ON OR B EFORE 31.10.2006 THE ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE A S TO WHY PENALTY UNDER SECTION 271B OF THE ACT SHOULD NOT BE LEVIE D. IN REPLY THE ASSESSEE EXPLAINED THAT DURING THE YEAR UNDER CONS IDERATION HE UNDERTOOK ERECTING OF A PETROL PUMP FOR SALE OF RELIANCE PE TROL PRODUCTS AND AS THE ASSESSEE WAS ENGAGED IN ERECTION OF THE SAID PETROL PUMP WHICH BEGAN ITS ACTIVITIES W.E.F. 27.11.2005 THE FINALIZATION OF THE ACCOUNTING WORK WAS DELAYED AND THE ACC OUNTS COULD BE COMPLETED ONLY BY THE FIRST WEEK OF DECEMBER 20 06. THEREAFTER THE SAME WERE AUDITED AND THE RETURN OF INCO ME WAS FURNISHED ON 15.03.2007 AS CERTAIN DETAILS REGARDING SALE O F SHARES HAD TO BE COLLECTED. THE ACCOUNTS MAINTAINED BY THE ASS ESSEE WERE TO BE AUDITED AS THE TURNOVER OF THE ASSESSEE EXCEEDED T HE PRESCRIBED TURNOVER MANDATING THE AUDIT OF ACCOUNTS. THE ASSESSI NG OFFICER REJECTING THE EXPLANATION OF THE ASSESSEE HELD THE ASSES SEE TO HAVE DEFAULTED IN FURNISHING THE AUDIT REPORT WITHIN THE PRESCRIB ED TIME AND ITA NO.328/PN/2011 SHIVSHANKAR M BIDWE (HUF) 3 CONSEQUENTLY WAS HELD LIABLE FOR LEVY OF PENALTY UNDER SEC TION 271B OF THE ACT AT RS.1 00 000/-. THE CIT(A) UPHELD THE ORDER OF T HE ASSESSING OFFICER AS THE ASSESSEE HAD FURNISHED THE AUDIT REPORT BE YOND THE DUE DATE OF FILING THE RETURN OF INCOME AND THE EXPLANATION FURNIS HED BY THE ASSESSEE WAS FOUND TO BE NOT TENABLE. 5. SHRI M.K. KULKARNI APPEARED FOR THE ASSESSEE AND SHRI B.C. MALAKAR APPEARED FOR THE REVENUE AND PUT FORWARD THEIR CONTENTIO NS. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE RAISED IN THE PRESENT CASE IS IN RELATION TO LEVY OF PENALTY UNDER SECTION 271B OF THE ACT IN CASES WHERE THE ASSES SEE IS REQUIRED UNDER THE ACT TO GET ITS ACCOUNTS AUDITED AND FURNISH T HE AUDIT REPORT AS REQUIRED UNDER SECTION 44BB OF THE ACT BEFORE THE AS SESSING OFFICER BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME. IN CASE THE PERSON FAILS TO GET ACCOUNTS AUDITED OR FURNISH THE REPORT WITHIN THE PRESCRIBED TIME THEN THE ASSESSING OFFICER MAY DIRECT SUC H PERSON AS LIABLE TO LEVY OF PENALTY UNDER SECTION 271B OF THE ACT WHIC H SHALL BE EQUAL TO % OF THE TOTAL SALES TURNOVER OR GROSS RECEIPT S AS THE CASE MAY BE OR A SUM OF RS.1 00 000/- AT THE RELEVANT TIME WHIC HEVER IS LESS. 7. THE ASSESSEE BEFORE US WAS LIABLE TO GET IS ACCOUNTS AUDITED AS THE TOTAL TURNOVER OF THE ASSESSEE FROM THE BUSINESS EX CEEDED THE PRESCRIBED LIMITS AND THE ASSESSEE WAS ALSO REQUIRED TO FU RNISH THE AUDIT REPORT ON OR BEFORE 31.10.2006. HOWEVER THE ASSES SEE FOR THE YEAR UNDER CONSIDERATION GET AUDITED ITS BOOKS OF ACCOU NT AND THE AUDIT REPORT WAS DATED 16.12.2006 WHICH WAS FURNISHED ALO NG WITH RETURN OF INCOME FILED ON 15.03.2007. THE ASSESSEE ADMITTE DLY HAD ITA NO.328/PN/2011 SHIVSHANKAR M BIDWE (HUF) 4 DEFAULTED IN NOT GETTING ITS ACCOUNTS AUDITED AND IN NOT FU RNISHING THE AUDIT REPORT WITHIN THE PRESCRIBED TIME. IN SUCH CIRCUMST ANCES THE ASSESSEE WAS HELD TO BE LIABLE TO LEVY OF PENALTY UNDER S ECTION 271B OF THE ACT. 8. UNDER THE PROVISIONS OF SECTION 271B OF THE ACT IT IS P ROVIDED THAT WHERE IF ANY PERSON FAILS TO GET ACCOUNTS AUDITED OR DOES NOT FURNISHES THE REPORT OF SUCH AUDIT WITHIN THE PRESCRIBED T IME THEN THE ASSESSING OFFICER MAY DIRECT THE ASSESSEE TO PAY BY WAY OF PENALTY THE SUM AS PRESCRIBED UNDER THE SECTION. IN OTHER WORDS THE LEVY OF PENALTY IN ALL CASES OF DEFAULT OF NOT GETTING THE ACCOUNTS AUDITED WITHIN TIME OR NOT FURNISHING THE AUDIT REPORT WITHIN THE P RESCRIBED TIME DOES NOT JUSTIFY THE LEVY OF PENALTY UNDER SECTION 27 1B OF THE ACT. IN CASES WHERE THE ASSESSEE HAD REASONABLE CAUSE IN N OT FURNISHING THE SAID AUDIT REPORT WITHIN TIME THEN THE REASONABLENESS OF THE DEFAULT OF THE ASSESSEE MAY BE CONSIDERED BEFORE LEVYING T HE PENALTY UNDER SECTION 271B OF THE ACT. ADMITTEDLY IN CASE OF THE ASSESSEE BEFORE US THE AUDIT REPORT WAS OBTAINED BY THE ASSESSE E THOUGH ON A DATE LATER THAN PRESCRIBED AND WAS FILED ALONG WITH RETURN OF INCOME BEFORE THE ASSESSING OFFICER ALSO ON A DATE LATER THAN THE PRESCRIBED DATE. THE ISSUE TO BE LOOKED INTO WHETHER THE ASSESSEE HAD A REASONABLE CAUSE VIS--VIS THE DEFAULT ENVISAGED UNDER SE CTION 271B OF THE ACT. THE CASE OF THE ASSESSEE WAS THAT IT WAS RU NNING THREE SETS OF BUSINESSES AND DURING THE YEAR UNDER CONSIDERATION IT W AS ENGAGED IN ERECTION OF A NEW PETROL PUMP FOR WHICH THE ACTIVITIES BEGA N ON 27.11.2005. THE CONSTRUCTION OF THE PETROL PUMP HAD TO B E COMPLETED WITHIN THE TIME INSISTED UPON BY THE SUPPLIER I.E. RELIANCE IND USTRIES AND DUE TO THE SAID WORK THE ASSESSEE WAS UNABLE TO FINALIZE ITS ACCOUNTS. THE ACCOUNTS MAINTAINED BY THE ASSESSEE WER E MANUAL IN ITA NO.328/PN/2011 SHIVSHANKAR M BIDWE (HUF) 5 THE YEAR UNDER APPEAL AND BECAUSE OF VARIOUS REASONS T HE COMPLETION OF THE ACCOUNTS GOT DELAYED AND CONSEQUENTLY THE AUDIT OF THE ACCOUNTS ALSO GOT DELAYED. IN THE ENTIRETY OF THE ABOVE FACTS AND CIRCUMSTANCES WE FIND MERIT IN THE PLEA OF THE ASSESSEE T HAT IT WAS PREVENTED BY A SUFFICIENT CAUSE IN NOT GETTING ITS ACCOUN TS AUDITED WITHIN THE PRESCRIBED TIME AND CONSEQUENTLY IN NOT FILING TH E AUDIT REPORT WITHIN THE PRESCRIBED TIME. HOWEVER THE SAID AUDIT REPORT WAS FURNISHED BY THE ASSESSEE ALONG WITH RETURN OF INCOME ON 15.03.2007. IN THE ENTIRETY OF THE ABOVE FACTS AND CIRCUMSTANCES WE FIND NO MERIT IN LEVY OF PENALTY UNDER SECTION 271B OF THE ACT. ACCORDIN GLY WE DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY LEVIED UN DER SECTION 271B OF THE ACT. THE GROUNDS OF APPEAL RAISED BY THE AS SESSEE ARE THUS ALLOWED. 9. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25 TH DAY OF NOVEMBER 2014. SD/- SD/- (R.K. PANDA) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE DATED: 25 TH NOVEMBER 2014. GCVSR COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A) AURANGABAD; 4) THE CIT AURANGABAD; 5) THE DR A BENCH I.T.A.T. PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T. PUNE