Income Tax Appellate Tribunal - Jaipur
Vjay Food Products, Ajmer vs Ito, Ajmer on 31 March, 2017
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IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR
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BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YADAV, AM
vk;dj vihy la-@ITA No.707/JP/16
fu/kZkj.k o"kZ@Assessment Year : 2013-14
M/s Vijay Food Products, HMT cuke The ITO, Ward 1(3), Ajmer
Industrial Area, Beawar Road, Vs.
Ajmer
LFkk;h ys[kk la-@thvkbZvkj la-@PAN No. AAAFV 8690 H
vihykFkhZ@Appellant izR;FkhZ@Respondent
fu/kZkfjrhdh vksj ls@Assessee by : Shri Subhash Porwal (CA)
jktLo dh vksj ls@Revenue by : Shri R.A.Verma (Add.CIT)
lquokbZ dh rkjh[k@Date of Hearing : 29.03.2017
?kks"k.kk dh rkjh[k@Date of Pronouncement: 31/03/2017.
vkns'k@ORDER
PER SHRI VIKRAM SINGH YADAV, A.M.
This is an appeal filed by the assessee against the order of Ld.CIT(A), Ajmer dated 09.06.2016 wherein the assessee has challenged the levy of penalty of Rs.77,170/- u/s 271B read with section 274(1) of the Act.
2. Briefly the facts of the case are that the AO observed that the assessee has e-filed its return of income on 18.09.2013 for the subject assessment year but the audit report in form No. 3CA/3CB,3CD and 3CEB has not been submitted in electronic form as per Notification No. 34 dated 01.05.2013 issued by the CBDT and a show cause notice for levy of penalty u/s 271B of the Act was issued to the assessee. In response to the show-cause notice, the ITA No. 707/JP/16 M/s Vijay Food Products, Ajmer Vs. ITO, Ward 1(3), Ajmer assessee has submitted that it has obtained the tax audit report on 04.09.2013 from its auditor M/s Sunil Porwal & Co. and the particulars about the tax audit report were also furnished in the Income Tax Return which was e- filed on 18.09.2013. It was further submitted that due to some technical snag in the e-filing system of tax department, the audit report filed seems not been reflected in the system. However, the said submission of the assessee did not find favour with the AO and he held that the assessee has failed to furnish report of auditor before due date as prescribed u/s 139 and imposed a penalty of Rs. 77,170/- under section 271B of the Act.
2.1 Being aggrieved, the assessee carried the matter in appeal before the ld.CIT(A), the ld. AR reiterated its submission made before the AO and submitted that the e-return filed on 18.09.2013 is based on the audit report and the audited financial statements, and the necessary particulars about the audit report have been disclosed as part of the e-return filed electronically. It was further submitted that due to technical snag in the e-filing system of tax department, the income tax return alongwith audit report was uploaded and filed, however, the audit report could not be viewed by the AO due to some system technical errorwhich is beyond the control of the assessee. The contentions of the ld. AR did not find favour with the Ld. CIT(A) and he has held that the appellant has not been able to show that it had filed audit report obtained u/s 44AB for the year under consideration. Further, in support of the contentions of the appellantthat audit report could not be uploaded due to some technical snag, no documentary evidence has been submitted. In view of the same, the levy of penalty u/s 271B for non-filing of audit report was confirmed.
2 ITA No. 707/JP/16 M/s Vijay Food Products, AjmerVs. ITO, Ward 1(3), Ajmer 2.2 Against the said order of the ld. CIT(A), the assessee has now come in appeal before this Bench. The ld. AR reiterated the submission made before the lower authorities and drawn our attention to the return of income e-filed on 18.09.2013 whereinparticulars relating to audit informationhas been disclosed which read as under:
Whether liable to maintain accounts as per section Y 44AA Whether liable for audit u/s 44AB Y If (b) is yes, whether the accounts have been audited by an accountant? If yes furnish the following information.
a. Date of furnishing of the audit report 2013-09-18
(DD/MM/YYYY)
b. Name of the auditor signing the tax audit report Sunil Porwal
c. Membership No. of the auditor 071805
d. Name of the auditor (Proprietorship/ firm) M/s Sunil Porwal &
Co.
e. Permanent Account Number (PAN) of the ACEPP3552C
proprietorship/firm
f. Date of Audit report 2013-09-04
2.3 Further, the ld. AR has drawn our reference to the decision of Hon'ble Supreme Court in the case of Hindustan Steel Ltd. vs. State of Orissa (83 ITR
26) wherein it was held that the penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard to its obligation. Penalty will not be imposed merely because it is lawful to do so.
Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum 3 ITA No. 707/JP/16 M/s Vijay Food Products, Ajmer Vs. ITO, Ward 1(3), Ajmer penalty is prescribed the authority competent to impose the penalty will be justified in refusing to impose penalty when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bonafide belief that the offender is not liable to act in the manner prescribed by the statute.
2.4 It was further submitted by the ld AR that as soon as the assessee became aware about the technical snag regarding tax audit report in e-filing system of tax department, the tax audit report has been freshly uploaded in the Income Tax system and a hard copy thereof filed with the AO. It was accordingly submitted that the return of income has been filed based on the tax audit report and the tax audit report both electronically and hard copy has been duly submitted with the AO.
2.5 The ld. DR is heard who has relied on the order of the lower authorities.
2.6 We have heard the rival contentions and perused the material available on record. The return of income has been electronically filed by the assessee on 18.09.2013 wherein the particulars regarding the audit report have been duly disclosed by the assessee. In the said return it has been stated clearly that Mr. Sunil Porwal, the auditor of the company has signed the audit report on 04.09.2013 and the said audit report has been furnished on 18.09.2013. The said income tax return which has been filed electronically and contents thereof including the audit particulars have not been disputed by the Revenue. It is therefore not in dispute that the audit report has been obtained before due date of filing of the return of income and the particulars thereof have been duly disclosed in the return of income electronically filed. It was further submitted by the ld AR that the audit report in Form 3CB/3CD has been 4 ITA No. 707/JP/16 M/s Vijay Food Products, Ajmer Vs. ITO, Ward 1(3), Ajmer uploaded on the same date ie, 18.9.2013 as date of filing of the return of income but due to some technical snag in the e-filing system of I.T system, the same could not be viewed later on by the AO, at the same time, the ld AR has not been able to furnish any confirmation that the audit report has been uploaded electronically on 18.09.2013. It is also a fact that the audit report has subsequently been uploaded afresh after the assessee become aware of the technical snag and also a hard copy has been furnished before the AO which is again not disputed by the Revenue. The intention behind carrying out the audit u/s 44AB and furnishing a copy of the audit report to the AO is to aid and assist the latter in completing the assessment proceedings. It is not the case of the Revenue that any prejudice or hindrance is caused to the Revenue or the audit report has been filed after the close of the assessment proceedings. Taking into consideration the intention of the legislature, and the fact that the audit report has subsequently been uploaded electronically and also hard copy has been furnished before the AO before the completion of the assessment proceedings, non furnishing of the return electronically on 18.09.2013 is merely a technical breach of the provisions of the Act and respectfully following the decision of the Hon'ble Supreme court in the case of Hindustan Steel Ltd. vs. State of Orissa (supra), penalty levied u/s 271B of the Act is hereby directed to be deleted.
In the result the appeal filed by the assessee is allowed.
Order pronounced in the open court on 31/03/2017.
Sd/- Sd/-
(KUL BHARAT) (VIKRAM SINGH YADAV)
U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member
5
ITA No. 707/JP/16 M/s Vijay Food Products, Ajmer
Vs. ITO, Ward 1(3), Ajmer
Jaipur
Dated:- 31/03/2017
vkns'k dh izfrfyfi vxzfs "kr@Copy of the order forwarded to:
1. vihykFkhZ@The Appellant- M/s Vijay Food Products. Ajmer
2. izR;FkhZ@ The Respondent- The ITO, Ward 1(3), Ajmer
3. vk;dj vk;qDr@ CITAjmer
4. vk;dj vk;qDr¼vihy½@The CIT(A) Ajmer
5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur
6. xkMZ QkbZy@ Guard File (ITA No.707/JP/2016) vkns'kkuqlkj@ By order, lgk;d iathdkj@ Assistant. Registrar.6