Jay Kishore Chaturvedi, Baroda v. The ACIT.,Circle-2(1),, Baroda

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE SHRI N.S.SAINI ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH JUDICIAL MEMBER ITA NO.431/AHD/2008 ASSESSMENT YEAR: 1999-00 DATE OF HEARING:28.4.10 DRAFTED:29.4.10 JAY KISHOR CHATURVEDI 2 ND FLOOR STERLING CENTER R.C.DUTT ROAD ALKAPUARI BARODA 390007 PAN NO.ABKPC6672R V/S . ASSTT. COMMISSIONER OF INCOME-TAX CIRCLE-2(1) BARODA 2 ND FLOOR AAYAKAR BHAVAN RACE COURSE BARODA-390007 (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI M.K. PATEL AR RESPONDENT BY:- SHRI C.K. MISHRA DR O R D E R PER MAHAVIR SINGH JUDICIAL MEMBER:- THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-II BARODA IN APPEAL NO.CAB/II -303/06-07 DATED 02-11-2007. THE PENALTY WAS LEVIED BY THE ACIT CIRCLE-2(1) BA RODA U/S.271B OF THE INCOME-TAX ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT) VI DE HIS ORDER DATED 29-09-2006. 2. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH FACTS AND CIRCUMSTANCES OF THE CASE. THE BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE THAT DUE DATE FOR FILING OF RETURN OF INCOME AS WELL AS AUDI T REPORT WAS 31-12-1999 FOR RELEVANT ASSESSMENT YEAR 1999-00. THE ASSESSEE FILED ONLY AU DIT REPORT ON 27-12-1999 AND SUBSEQUENTLY ASSESSEE FILED RETURN OF INCOME ALONG WITH REVISED AUDIT REPORT ON 29- 03-2001. THE ASSESSEE FILED REVISED AUDIT REPORT F OR MAKING CLAIM OF BAD DEBT OF RS.41 25 305/- AS AGAINST THE ORIGINAL CLAIM OF RS. 11 75 223/- AND ASSESSMENT WAS COMPLETED U/S.143(3) OF THE ACT R.W.S 147 OF THE AC T BY VIRTUE OF WHICH PENALTY U/S. ITA NO.431/AHD/2008 A.Y. 1999-00 JAY K CHATURVEDI V. ACIT CIR-2(1) BARODA PAGE 2 271B WAS INITIATED. THE ASSESSING OFFICER LEVIED T HE PENALTY BY GIVING FOLLOWING FINDING IN PARA-2 AND 3 OF HIS PENALTY ORDER:- 2. THE CONTENTIONS OF THE ASSESSEE ARE NOT TENABLE . THE ASSESSEE HAS ONLY FILED AUDIT REPORT DATED 26/05/1999 ON 27/12/1999 BUT DID NOT FILED RETURN OF INCOME. THE ORIGINAL RETURN OF INCOME FILED ALONG W ITH REVISED AUDIT REPORT DATED 20/12/2001 ON 29-03-2001 I.E. AFTER LAPSE OF 15 MONTHS. THIS SHOWS THAT AUDIT OF ACCOUNTS WERE NOT COMPLETED WITHIN TH E PRESCRIBED TIME LIMIT U/S.44AB. AS PER THE PRESCRIBED TIME LIMIT U/S.139( 1) OF THE ACT FOR FILING RETURN OF INCOME AND/OR AUDITED REPORT FOR A.Y. 199 9-2000 FOR THE PERSONS LIABLE TO GET THEIR ACCOUNTS AUDITED U/S.4AB WAS 31 -12-1999. FAILING TO FILE RETURN IN SUCH A LONG PERIOD CAN NOT BE HELD AS A D ELAY OCCURRED DUE TO CIRCUMSTANCES BEYOND CONTROL. THEREFORE THE ASSESSE E HAS FAILED TO COMPLY WITH THE PROVISIONS OF SECTION 44AB VIS--VIS SECTI ON 139(1). 3. FROM THE ABOVE IT IS CLEAR THAT THE ASSESSEE HAS FAILED TO COMPLY THE PROVISIONS OF SECTION 44AB OF THE ACT WITHOUT ANY R EASONABLE CAUSE THEREFORE IT IS LIABLE FOR THE PENALTY AS PRESCRIBED IN THE S ECTION 271B. ACCORDINGLY I HEREBY LEVY A PENALTY OF RS.1 00 000 /- BEING LESS THAN 0.5% OF TOTAL TURNOVER OF RS.2 71 59 910/- I.E. RS.1 35 799/- 3. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE CIT( A). THE CIT(A) ALSO CONFIRMED THE ACTION OF THE ASSESSING OFFICER BY GI VING FOLLOWING FINDING IN PARA-2.3 OF HIS APPELLATE ORDER:- 2.3 I HAVE CONSIDERED THE SUBMISSIONS OF THE COUNS EL AND FACTS OF THE CASE. APPELLANT SUBMITTED TAX AUDIT REPORT AS ON 27.12.19 99 BUT THE RETURN OF INCOME WAS NOT FURNISHED. AFTERWARDS APPELLANT FURNISHED A NOTHER TAX AUDIT REPORT ON 29.03.2001 ALONG WITH THE RETURN. ALONG WITH THE RE TURN THE TAX AUDIT REPORT FURNISHED WAS DIFFERENT THAN THE TAX AUDIT REPORT F URNISHED EARLIER. IN THE ORIGINAL TAX AUDIT REPORT APPELLANT CLAIMED BAD DEB T OF RS.11 79 223/- WHEREAS IN THE REVISED TAX AUDIT REPORT THE SAME WERE CLAI MED AT RS.31 25 305/-. SUCH ADDITIONAL CLAIM OF THE APPELLANT HAS CHANGED THE P ROFIT & LOSS ACCOUNT IT HAS ALSO CHANGED BALANCE-SHEET AND ALSO THE TAX AUDIT R EPORT. CONSIDERING THIS FACT IT IS CLEAR THAT THE TAX AUDIT REPORT FURNISH ED WITHIN DUE DATE OF FILING RETURN OF INCOME WAS A AD HOC TAX AUDIT REPORT AND CANNOT BE CONSIDERED THE AUDIT REPORT FILED U/S.44AB. SINCE THE AUDIT REPORT FILED ALONG WITH THE RETURN OF INCOME WAS BEYOND THE TIME AND THEREFORE THERE HAS BEEN A DEFAULT U/S.271B. SINCE THE ACCOUNTS AND AUDIT REPORT HAVE COMPLETELY CHANGED FIGURES THE FIRST AUDIT REPORT FILED WITHIN DUE DATE CANNOT BE CONSID ERED AS VALID AUDIT REPORT. IN VIEW OF THE SAME I HOLD THAT APPELLANT HAS NOT FIL ED TAX AUDIT REPORT U/S.44AB WITHIN TIME AND THEREFORE APPELLANT IS LIABLE FOR P ENALTY. VARIOUS FACTS MENTIONED BY THE APPELLANT DO NOT CHANGE THE FACTS OF THE CASE THAT THE TAX AUDIT FILED SUBSEQUENTLY IS DIFFERENT THAN WHAT WAS FILED WITHIN DUE DATE. CONSIDERING THESE THERE HAS BEEN DEFAULT FOR WHICH PENALTY HAS BEEN RIGHTLY IMPOSED BY THE ASSESSING OFFICER. THERE HAS NOT BEE N ANY JUSTIFIABLE REASON FOR DELAY IN FILING THE CORRECT TAX AUDIT REPORT AL ONG WITH RETURN OF INCOME AND THEREFORE THE PENALTY LEVIED BY THE ASSESSING OFFIC ER IS CONFIRMED. ITA NO.431/AHD/2008 A.Y. 1999-00 JAY K CHATURVEDI V. ACIT CIR-2(1) BARODA PAGE 3 4. WE FIND THAT THE ASSESSEE HAS FILED AUDIT REPORT ON 27-12-1999 FOR WHICH DUE DATE WAS 31-12-1999 AND THIS IS AN ADMITTED POSITIO N. ASSESSEE FILED REVISED RETURN OF INCOME ON 29-03-2001 ALONG WITH REVISED AUDIT RE PORT THEREBY MAKING REVISED CLAIM BAD DEBT AT RS.41 21 305/-. FROM THE ORDERS O F LOWER AUTHORITIES WE FIND THAT THE AUDIT REPORT WAS FILED ON 27-12-1999 BUT THE RE VENUE HAS NOWHERE BROUGHT ANYTHING ON RECORD THAT AUDIT WAS NOT COMPLETED AS ON THAT DATE. WE FURTHER FIND FROM THE PENALTY ORDER OF THE ASSESSING OFFICER THAT HE HAS NOT EXAMINED THE CHARTERED ACCOUNTANT WHO COMPLETED THE AUDIT OF THE ASSESSEE ON 27-12-1999 AND IN THE ABSENCE OF ANY NEGATIVE IT IS PRESUMED THAT THE AS SESSEE HAS COMPLIED WITH THE CONDITION OF FILING OF AUDIT REPORT I.E. THE AUDIT WAS COMPLETED AS ON THAT DATE MUCH BEFORE DUE DATE OF FILING AUDIT REPORT. IN THE ABS ENCE OF ANYTHING CONTRARY WE ARE OF THE VIEW THAT PENALTY LEVIED BY THE ASSESSING OFFIC ER IS WITHOUT ANY BASIS AND WE DELETE THE SAME. THE ORDERS OF LOWER AUTHORITIES AR E REVERSED. THIS ISSUE OF THE ASSESSEES APPEAL IS ALLOWED. 4. IN THE RESULT ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 07/ 05/2010 SD/- SD/- (N.S.SAINI) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD DATED : 07/05/2010 *DKP COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)- II BARODA 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD