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2018 (4) TMI 883 - AT - Income TaxAddition made on account of deposit in S.B. A/c in the hands of the assessee s brother substantively and addition of the same amount was made in the hands of the assessee protectively - Held that - Order passed by the CIT(A) needs slight modification. The direction of the CIT(A) that if addition is deleted in the hands of Ram Prakash Senapati then addition in the hands of the assessee should be confirmed is not correct. In our considered view, if the addition in the hands of Ram Prakash Senapati comes to be deleted, then it has to be examined as to whether the addition can be made in the hands of the assessee or not. Hence, we modify the order of the CIT(A). We direct the Assessing Officer to adjudicate the issue of addition in the hands of the assessee after allowing reasonable opportunity of hearing to the assessee. With these directions, the grounds of appeal of the assessee are allowed. Levy of penalty u/s 271B - assessee did not file tax audit report u/s.44AB of the Act for the impugned assessment year 2009-2010 before the due date of filing of return of income 139(1) - Held that - The audit report was obtained within section 139(1) time limit is not in dispute. It is also not in dispute that the copy of audit report was furnished to the Assessing Officer as and when the Assessing Officer called for the same. The revenue has not brought no material on record to show that the assessee has violated the above quoted circular of CBDT. In these circumstances, following the above quoted circular of the CBDT, in our considered view, penalty levied u/s.271B of the Act in the instant case is untenable - Decided in favour of assessee.
Issues:
1. Appeal against orders of CIT(A) for assessment year 2009-2010. 2. Addition of ?27,14,906 in the hands of the assessee. 3. Confirmation of penalty under section 271B of the Act of ?63,215. Issue 1: Appeal against orders of CIT(A) for assessment year 2009-2010 The assessee filed appeals against separate orders of the CIT(A)-2, Bhubaneswar for the assessment year 2009-2010. The grounds of appeal included challenging the orders as improper, illegal, and excessive, invoking Sec. 147 of the IT Act, treatment of alleged cash deposits, addition of income on protective basis, and errors in confirming the assessment order. The CIT(A) directed the Assessing Officer to examine the addition in the hands of the assessee based on the outcome of the assessment in the case of the assessee's brother. The Tribunal modified the CIT(A) order, directing the Assessing Officer to adjudicate the issue of addition in the assessee's hands after providing a reasonable opportunity of hearing. Issue 2: Addition of ?27,14,906 in the hands of the assessee The addition was made in the hands of the assessee protectively, mirroring the addition made in the hands of the assessee's brother. The CIT(A) directed the Assessing Officer to confirm the addition in the assessee's hands if the addition in the brother's hands was deleted, and vice versa. The Tribunal found the CIT(A)'s direction incorrect, stating that if the addition in the brother's hands is deleted, the Assessing Officer must assess whether the addition can be made in the assessee's hands. Consequently, the Tribunal allowed the grounds of appeal raised by the assessee. Issue 3: Confirmation of penalty under section 271B of the Act of ?63,215 The Assessing Officer levied a penalty under section 271B for failure to audit accounts and furnish the audit report within the prescribed time. The assessee contended that the audit report was obtained within the time limit under section 139(1) and was submitted when requested by the Assessing Officer. The Tribunal referred to a CBDT circular stating that no penalty should be levied if the audit report is obtained within the due date, and the report is furnished when required. As the revenue failed to show any violation of the circular, the Tribunal deemed the penalty untenable and deleted it, allowing the appeal of the assessee. In conclusion, the Tribunal allowed the appeals of the assessee against the orders of the CIT(A) for the assessment year 2009-2010, modified the direction regarding the addition in the hands of the assessee, and deleted the penalty levied under section 271B of the Act.
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