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Income Tax Appellate Tribunal - Bangalore

Icds Limited, Manipal vs Assessee on 12 October, 2009

             IN THE INCOME TAX APPELLATE TRIBUNAL,
                      BANGALORE BENCH 'A'

 BEFORE DR. O.K NARAYANAN, VICE PRESIDENT AND
SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER

                              ITA No.26/Bang/2010
                               (Asst. Year - 2004-05)

M/s Synergistics Security Products (I) Pvt. Ltd.,
No.348, 14th Cross, IX Main, Second Stage,
Indiranagar,
Bangalore-560 038.                                        . Appellant

      Vs.

The Asst. Commissioner of Income-tax,
Circle-12(2),
Bangalore.                                          . Respondent


                   Appellant by : Shri Narendra Kumar, Advocate

                   Respondent by : Smt. Jacinta Zimik Vashai, Addl. Commissioner
                                                           of Income-tax

                                ORDER

PER DR. O.K NARAYANAN, VICE PRESIDENT This appeal is filed by the asseessee. The relevant assessment year is 2004-05. The appeal is directed against the order of the CIT(A) III at Bangalore dated 12/10/2009 and arises out of the penalty order passed u/s 271B.

2. The law provides that the assessee bound to get his accounts audited u/s 44AB has to file the audit report within the time stipulated u/s 139(1). In the present case, the filing was made only on 31.01.2005. There was failure on the part of the assessee to file the audit report along with the return of income before the due date. Notice u/s 271 read with sec. 271B was issued on 18.08.2005. The explanation for the delay was stated to be illness of one of the Directors of the assessee company. But the Assessing Officer held that ill health of the Director has in no way affected in the day to day business activities of the assessee company. He also observed that how the accounts could be audited within three days, when one of the Directors of the assessee company was ill. Accordingly, he rejected the arguments of the assessee and levied the penalty of Rs.1 lakh. The levy of penalty was confirmed in the appeal. The assessee is aggrieved and, therefore, the second appeal before us. In support of the contentions, the learned counsel appearing for the assessee has relied on the following decisions :

(i) CIT Vs. KPV Shaik Mohammed Rowther Co., 1998 (232) ITR 176 (Mad.)

(ii) CWT Vs. Ramaniklal D Mehta, 1982 (136) ITR 729 (Ors.).

3. We considered the issue. It is not a case where no audit report was filed at all. The audit report was filed but belated. The audit report was filed on 31.01.2005. The delay is very nominal. The assessee has explained the reason that one of the active Directors of the assessee company was ill during the relevant period. The lower authorities have no dispute on the said state of affairs that the Director was ill. In the light of these circumstances, we find that the explanations offered by the assessee do really constitute a reasonable cause as envisaged in sec. 271B. We find that the levy of penalty is not justified. It is deleted.

4. In result, the appeal filed by the assessee is allowed.

Order pronounced on Tuesday, the 20th day of April, 2010, at Bangalore.

           Sd/-                                           Sd/-
(SHAILENDRA KUMAR YADAV)                        (DR. O.K NARAYANAN)
   JUDICIAL MEMBER                                VICE PRESIDENT

Vms.
                                      4         ITA No.26/B/2010




Copy to :
      1. The Assessee
      2. The Revenue
      3.The CIT concerned.
      4.The CIT(A) concerned.
      5.DR
      6.GF
     7..GF, ITAT, New Delhi.             By order

                            Asst. Registrar, ITAT, Bangalore.