2017 (6) TMI 386 - AT - Income Tax

Penalty order u/s 271B r/w Sec.274 - technical snag as occurred in uploading of audit report on web - non furnishing of the return electronically - Held that - As decided in case of M/s Vijay Food Products Vs. ITO 2017 (4) TMI 172 - ITAT JAIPUR under similar circumstances 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 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 - Decided in favour of assessee.

Summary

Issues:
Confirmation of penalty under Section 271B read with Section 274 of the Income Tax Act, 1961.

Detailed Analysis:

Issue 1: Confirmation of Penalty under Section 271B read with Section 274 of the Income Tax Act

The appellant filed an appeal against the penalty imposed under Section 271B read with Section 274 of the Income Tax Act for the assessment year 2013-14. The Assessing Officer noted that the appellant failed to submit the requisite audit report in electronic form as mandated by a CBDT notification. Consequently, a show cause notice for penalty was issued and the penalty was imposed. The appellant contended that the delay in uploading the audit report was due to technical issues beyond their control. The appellant cited previous Tribunal decisions where penalties were deleted in similar circumstances. The ld DR supported the Assessing Officer's decision.

The ITAT considered the facts and previous decisions. In a similar case, M/s Vijay Food Products Vs. ITO, the ITAT held that the audit report was obtained before the due date of filing the return, and the details were disclosed electronically. Although there was a technical issue in uploading the report, it was later rectified, and a hard copy was provided to the AO before the completion of assessment proceedings. Following the principle that the audit report aids in assessment proceedings and no prejudice was caused to the Revenue, the ITAT directed the penalty under Section 271B to be deleted. Given the identical facts in the present case, the ITAT ordered the Assessing Officer to delete the penalty, allowing the appeal of the assessee.

Therefore, the ITAT ruled in favor of the appellant, deleting the penalty imposed under Section 271B read with Section 274 of the Income Tax Act for the assessment year 2013-14.