2013 (1) TMI 994 - AT - Income Tax

Summary

Issues involved: Appeal against penalty imposed u/s 271B for delay in filing tax audit report.

Summary:

1. The appellant, an individual engaged in garment manufacturing and wholesale trading, filed an appeal against the penalty of Rs. 1,00,000 imposed by the AO u/s 271B for delay in filing the tax audit report beyond the prescribed time limit under section 44AB.

2. The AO, after a survey u/s 133A, noticed the delay in filing the tax audit report and imposed the penalty. The appellant cited the delay in receiving a stock statement during the survey as the reason for the delay in finalizing accounts and getting them audited.

3. The penalty was challenged before the CIT(Appeals) reiterating the appellant's contention that the delay in receiving the stock statement constituted a sufficient cause for non-compliance with section 44AB.

4. The CIT(Appeals) upheld the penalty citing that the appellant failed to prove that the stock statement was not provided before the due date for filing the audit report. The Tribunal was approached against this decision.

5. The Tribunal observed discrepancies in the AO and CIT(Appeals) reasoning. The appellant provided a sequence of events and an affidavit affirming the delay in receiving the stock statement, leading to the delay in audit report submission. Considering this, the Tribunal canceled the penalty u/s 271B, allowing the appeal.

6. Consequently, the appeal of the appellant was allowed, and the penalty imposed by the AO and confirmed by the CIT(Appeals) u/s 271B was canceled.