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Income Tax Appellate Tribunal - Jaipur

Govind Garg , Kekri vs Ito, Ajmer on 31 January, 2017

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       IN THE INCOME TAX APPELLATE TRIBUNAL,
                 JAIPUR BENCHES (SMC), JAIPUR

            Jh HkkxpUn] ys[kk lnL; ds le{k
      BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER

             vk;dj vihy la-@ITA No. 781/JP/2016
             fu/kZkj.k o"kZ@Assessment Year : 2013-14

Shri Govind Garg                          cuke The ITO
Prop.: M/s. Garg Enterprises              Vs. Ward- 2(3)
Near Clock Tower, Junia Gali Road              Ajmer
Kekri
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAVPG 2167 K
vihykFkhZ@Appellant                            izR;FkhZ@Respondent

             fu/kZkfjrh dh vksj ls@Assessee by: written submission
             jktLo dh vksj ls@ Revenue by: Smt. Poonam Rai, DCIT- DR

             lquokbZ dh rkjh[k@ Date of Hearing :        25/01/2017
             ?kks"k.kk dh rkjh[k@ Date of Pronouncement : 31 /01/2017

                          vkns'k@ ORDER

PER BHAGCHAND, AM

The assessee has filed an appeal against the order of the ld. CIT(A) , Ajmer dated 13-06-2016 for the assessment year 2013-14 regarding confirming the penalty of Rs. 83,574/- u/s 271B r.w.s. 274 by the ld.

CIT(A).

2.1 Apropos solitary ground of the assessee, the facts as emerges from the order of the ld. CIT(A) is as under:-

Shri Govind Garg vs. ITO, Ward- 2 (3), Ajmer ''4.3 I have gone through the penalty order, statement of facts, grounds of appeal and written submission carefully. It is seen that the appellant has not been able to show that it had filed the audit report obtained u/s 44AB for the A.Y. 2013-14. The contention of the appellant that the audit report could not be uploaded due to some technical problem is also not supported with any documentary evidence. Therefore, this contention of appellant is also not found acceptable. No other reasonable cause for non-submission of the audit report has been given by the appellant. In view of these facts, I am of the considered view that the AO has rightly levied the penalty u/s 271B for non-filing of audit report as required u/s 44AB. Accordingly, the penalty levied by the AO is confirmed.'' 2.2 None appeared on behalf of the assessee in spite of noting the date of next date of hearing i.e. 25-01-2017 on 22-12-2016. Consequently the Bench is left with no alternative but to decide the appeal on merits, ex parte qua the assessee's written submission, after hearing ld. DR and after perusal of the materials available on record. The facts relating to the issue in question is submitted by the assessee in his written submission is as under:-

''1 The assessee Mr. Govind Garg had got his accounted audited before due date of filing of ITR (due date was 30-09- 2013 that was extended upto 31st Oct. by CBDT for assessment year 2013-14) and obtained a physical copy of the audit report on 24-09-2013.

2. After he filed his ITR on line on 1-10-2013 before the extended due date of filing the ITR , alongwith the copy of audited financial accounts duly signed by the auditor, as attachment to on-line ITR.

Shri Govind Garg vs. ITO, Ward- 2 (3), Ajmer

3. He added the name of the concerned auditor to the Income tax Potal for submission of the tax audit report and now it was the turn of the auditor to file the audit report online under his digital signature and it was not in the control of the assessee to do anything further in this regard. However, the auditor failed to file the Audit Report online when the fact of non-filing of auditors report came to assessee's notice, it was explained by the auditors to him that it was first time when the Audit Report u/s 44AB was to be filed on line under his DSC and the software utility was being update very frequently by the IT Department and there had been occurring some technical problems in fling the e- audit report online and it was understood by the auditors that the report was submitted online but actually the same was unfurnished to the system and there was no conscious breach of law on his part.

4. The assessee has also not breached the law consciously and in view of the ratio laid down by the Hon'ble Apex Court in the case of Hindustan Steel Ltd. vs. State of Orissa on 4th Aug. 1969 citations 1970 AIR 253, 1970 SCR (1) that in case there is no conscious breach of law, imposing penalty is not justified, hence the penalty levied u/s 271B in this case is not justified in law.

5. It is undisputed fact that the assessee has submitted the ITR on line for concerned year and attached the copies of audited financial statement on line, there has been change in the income in the ITR since then which is based on the audited financial statements, there has been no security undertaken in this by the income tax department, as such the income returned by the assessee has been accepted that proves that there is nothing conscious n part of the assessee which held him back from filing the audit report online.

6. On continuous pursuance by the assessee the report has also been filed online later on by the auditors, copy enclosed as Page No. 3 to 11, the perusal of the report reveal that there is no negative remarks, observation or qualification in the report that also prove the integrity of the 4 ITA No.781/JP/2016 Shri Govind Garg vs. ITO, Ward- 2 (3), Ajmer assessee and proves that non-filing of the same on time was not done consciously, moreover, it was to be filed by the auditors during this Digital Signatures and he had no control in this process.

7. The above facts were also explained to the AO and the ld. CIT(A) which have elaborately been reproduced in para 4.2 of the order of the ld. CIT(A) and remained undisputed by the authorities below as well as by the assessee, the penalty was imposed by the AO irrespective of the above facts that proves the bona fide of the assessee. The penalty was sustained by the ld. CIT(A) under the plea that the assessee could not produce the evidence to support that the report could not be uploaded for technical reasons, though it remained unconsidered that it was not the fault or misconduct by the assessee, it was not filed by the auditor for whatsoever reason, for that the assessee could not be penalized.'' 2.3 I have heard the ld. DR and perused the materials available on record including the written submission of the assessee. It is not imperative to repeat the facts of the case as the same had been explicitly narrated by the lower authorities. It is noted that similar type of issue has already been decided by this Bench in the case of Smt. Raj Kumar Bafna vs. ITO (ITA No. 837/JP/2016 for the assessment year 2013-14 vide order dated 14-12-2016) wherein the Bench had allowed the appeal of the assessee on the issue of imposing penalty u/s 271B of the Act by observing as under:-

Shri Govind Garg vs. ITO, Ward- 2 (3), Ajmer 2.5 I have heard the rival contentions and perused the materials available on record. It is noted from the records that the assessee had not uploaded the audit report on e-filing portal in electronic mode for which the AO imposed the penalty of Rs. 1.50 lacs u/s 271B of the Act which had also been confirmed by the ld. CIT(A). It is noticed from the records that the assessee had filed the return of income for the assessment year 2013-14 on 21-06-2013 electronically and the assessee got her accounts audited on 12-06-2013. It is also noticed from the records that copy of ITR Forms, acknowledgement and tax audit report dated 12-06-2013 were furnished to the AO. The CA of the assessee could not upload the audit report because of technical problem in the server/ site of the Department. The assessee was under bona fide belief that the report is already uploaded. However, the assessee had filed the tax audit report dated 12-06-2013 before the AO. It is also noticed that the assessee being low educated and she was not aware of the e-filing system particularly uploading of audit report on internet as it was first time introduced by the Department to upload the same.

It appears that it is a technical breach on the part of the assessee as the audit report could not upload on account of site/ server problem of the system. The ld. AR of the assessee relied on various case laws which have been taken into consideration. The ld. AR of the assessee taking the support of the Hon'ble Kerala High Court in the case of ACIT & Anr vs. Dr. K. Satish Shetty (2009) 310 ITR 366 submitted that that this is first time when assessee was required to e-file the audit report and prior to that no such reports were being furnished. Hence, the penalty should not be levied. In view of the above facts and circumstances of the case, I am of the considered view that the penalty imposed by the lower authorities u/s 271B of the Act on the assessee is not justifiable as the audit report was to be uploaded by the Chartered Accountants who audited her books of account and the assessee was low educated and she had under bona fide belief that the same had been uploaded in the system developed by the Department. In such a situation, I direct to delete the penalty of Rs. 1.50 lacs levied 6 ITA No.781/JP/2016 Shri Govind Garg vs. ITO, Ward- 2 (3), Ajmer u/s 271B of the Act. Thus the appeal of the assessee is allowed.

Since the facts of the issue in question of the assessee are same wherein the penalty of Rs. 83,574/- was confirmed u/s 271B of the Act by the ld.

CIT(A), therefore, respectfully following the order of this Bench on similar facts and circumstances of the assessee's case u/s 271B of the Act, the appeal of the assessee is allowed.

3.0 In the result, the appeal of the assessee is allowed Order pronounced in the open court on 31 /01/2017.

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                                                       ¼HkkxpUn½
                                                     (Bhagchand)
                                          ys[kk lnL;@Accountant Member
Tk;iqj@Jaipur
fnukad@Dated:-                 31 /01/ 2017
*Mishra

vkns'k dh izfrfyfi vxzfs "kr@Copy of the order forwarded to:

1. vihykFkhZ@The Appellant- Shri Govind Garg, Kekri

2. izR;FkhZ@ The Respondent- The ITO, Ward- 2(3), Ajmer

3. vk;dj vk;qDr¼vihy½@ CIT(A).

4. vk;dj vk;qDr@ CIT,

5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur

6. xkMZ QkbZy@ Guard File (ITA No. 781/JP/2016) vkns'kkuqlkj@ By order, lgk;d iathdkj@ Assistant. Registrar