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2017 (12) TMI 1469 - AT - Income TaxPenalty u/s 271B - books of accounts were not submitted to CA prior to 30.09.2005 - reasonable cause for delay - Held that - Assessee has not explained before us the reasonable cause for delayin getting the tax audited done. The ld. Counsel only stated that the tax audit report was signed on 21.12.2005 and the return was filed on 28.12.2005 and explained us that tax auditor delayed the accounts, is not acceptable in view of the tax auditor certificate mentioned above.The assessee has explained the delay between 21.12.2005 to 28.12.2005 which is not relevant here, because this is the further delay after getting the delayed tax audit report. The counsel for the assessee has failed to explain the delay between 30.09.2005 to 21.12.2005 therefore, we are of the view that it is failure on the part of the assessee. Unless it is proved that there was reasonable cause for the failure, there is no escape from the imposition of penalty. The assessee has failed to submit the relevant papers/documents to the CA to get the accounts audited. The assessee has failed to explain the delay in submitting the books of accounts to his CA. - Decided against assessee.
Issues Involved:
1. Justification of penalty under Section 271B of the Income Tax Act. 2. Consideration of Section 273B for reasonable cause. 3. Applicability of previous court decisions. Issue-wise Detailed Analysis: 1. Justification of Penalty under Section 271B: The primary issue revolves around the imposition of a penalty of ?1,00,000 under Section 271B of the Income Tax Act for failure to get accounts audited within the stipulated time. The assessee filed the return of income on 28.12.2005, with the audit report signed on 21.12.2005, which was delayed beyond the due date of 30.09.2005. The Assessing Officer (AO) initiated penalty proceedings under Section 271B as the assessee failed to comply with Section 44AB requirements. The AO observed that the delay was attributed to the auditor but found this unsubstantiated by material evidence, thus imposing the penalty. 2. Consideration of Section 273B for Reasonable Cause: The assessee argued that the delay was due to the auditor's late submission of the audit report, claiming this as a reasonable cause under Section 273B. The CIT(A) upheld the penalty, stating that the assessee was aware of the compliance requirements and could not shift the blame to the auditor without substantial evidence. The CIT(A) referred to judgments that emphasize the need for reasonable cause to avoid penalties. The Tribunal noted that the assessee failed to provide a valid reason for not submitting the books of accounts to the auditor before the due date, thus failing to prove a reasonable cause for the delay. 3. Applicability of Previous Court Decisions: The assessee cited various judgments, including those of the Allahabad High Court and Madras High Court, to argue that delays caused by auditors could be considered a reasonable cause. However, the Tribunal found these judgments distinguishable from the present case. The Tribunal emphasized that the responsibility to get the accounts audited lies with the assessee, not the auditor. The Tribunal observed that the delay was on the part of the assessee in submitting the books of accounts to the auditor, as evidenced by the auditor's certificate stating that the books were given for audit after the due date. Conclusion: The Tribunal dismissed the appeal, affirming the penalty under Section 271B. It concluded that the assessee failed to demonstrate a reasonable cause for the delay in getting the accounts audited. The Tribunal highlighted that the onus to ensure timely audit lies with the assessee, and failure to provide necessary documents to the auditor in time does not constitute a reasonable cause under Section 273B. The Tribunal's decision underscores the importance of adhering to statutory deadlines and the limited scope for leniency in the absence of substantiated reasonable cause.
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