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TMI Blog2017 (12) TMI 1469X X X X Extracts X X X X X X X X Extracts X X X X ..... submitting the books of accounts to his CA. - Decided against assessee. - ITA No. 1006/Kol/2015 - - - Dated:- 29-11-2017 - Shri A. T. Varkey, JM And Dr. A. L. Saini, AM Assessee by : Shri T. K. Chakraborty, Advocate Respondent by : Shri KalyanNath, ACIT ORDER Per Dr. Arjun Lal Saini, AM The captioned appeal filed by the assessee, pertaining to Assessment Year 2005-06, is directed against the order passed by the Commissioner of Income Tax (A)-13, Kolkata in Appeal No.562/CIT(A)-13/W-44(4)/14-15, dated 23.04.2015, which in turn arises out of a penalty order passed by the Assessing Officer u/s 271B of the Income Tax Act, 1961, (hereinafter referred to as the Act ), dated 26.03.2010. 2.The assessee has raised the following grounds of appeal: 1. That, on the facts and in the circumstances of the case, the ld. CIT(A) was not justified in upholding penalty of ₹ 1,00,000/- imposed by the Assessing Officer u/s 271B of the I.T. Act without recording any finding as to how the submission of the assessee was not acceptable as evidence. 2. That, the ld. CIT(A) also erred in law in confirming penalty u/s 271B of the I.T Act without legally considerin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 1,00,000/-, the assessee filed an appeal before the CIT(A) who has confirmed the penalty u/s 271B of the Act. The ld. CIT(A) observed that the provision of section 271B making filing of audit report along with return of income compulsory is in stipules from the year 1995. The very fact that the assessee claims to have audited the account with the help of a Chartered Accountant, in time, indicate he was aware of the provisions and even had the expert guidance of a Chartered Accountant. Under such circumstances he cannot avoid penalty by shifting the blame to his account. The CIT(A) relied on the judgment of the Hon'ble High Court of Calcutta in CIT vs. Capital Electronics 261 ITR 4 (Cal) 2003, wherein it was held that provisions of section 271B read with section 273B, makes it clear that the penalty is to be imposed when the assessee is not able to provide a reasonable cause for such failure. Absolute default on the part of the assessee need not be proved. It was further held that the provision was simply a coercive method to secure compliance of provisions of the Act. The CIT(A) noted that in the present case, the assessee has not been able to prove that there was a re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see on 09.05.2013 and also cited the decision of I.T.A.T., Jobbalpur Bench in the case of Lalta Prasad Chaurasia -VS- I.T.O. 104, Taxman 110 and also the decision of Madras High Court in the case of C.I.T.- VS - Apex Laboratories Pvt. Ltd reported in (2010) 320 ITR 498 (Madras).The C.I.T. (A) - 13, Kolkata while disposing of this case cited the decision of Kerala High Court in the case of River View Bar Silver Restaurant -VS - C.I.T. (Central), 211 Taxman 187 (Ker) and also the decision of Calcutta High Court in the case of C.I.T. -Vs - Capital Electronics, 261, ITR 4 (Cal). The Counsel submitted us that the decisions of these Hon ble Courts are totally distinguishable from the fact of this case and the Hon'ble Calcutta High Court especially emphasized on the reasonable cause which is the dominant factor for proving the default. The ld. Counsel for the assessee has relied on the judgment of the Allahabad High Court in the case of CIT Vs. U.P. RajyaSahkariEvamBhoomiVikas Bank Ltd. dated 26th April, 2010 wherein it was held thatthe delay was caused on the part of the auditors and it amounts to reasonable cause. The ld. Counsel for the assessee hasaslo relied on the judgme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,000/- whichever is less. In this case, the assessee failed to get his accounts audited u/s 44AB, therefore, the AO imposed penalty of ₹ 1,00,000/-. Before us, the Counsel for the assesseesubmitted that as per provisions of section 273B of the Income Tax Act, no penalty shall be imposed on the assessee for any failure, if he proves that there was reasonable cause for the said failure. In the assessee s case under consideration, the counsel for theassessee has explained us reasonable cause stating that there was a delay in submitting paper to the tax auditor as the books of accounts of the firm was given to the auditor as on 31.10.2005. We find that, there was a delay on the part of the assessee in submitting books of accounts to the tax auditor (vide certificate of tax auditor). In this case, the tax audit should have been completed up to 30.09.2005. Therefore, books of accounts should have been given by the assessee to the tax auditor before 30.09.2005 but as per the certificate of the CA the books of accounts were given to the CA before 31.10.2005 therefore it is delay on the part of the assessee and the assessee did not explain this delay before us. The assesseehas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was reasonable cause for the failure, there is no escape from the imposition of penalty. Section 271B does not leave any discretion at the hands of the authority except as provided in section 273B. It is only when reasonable cause for failure is proved, the penalty can be avoided. In this case under consideration, the ld. Counsel for the assessee has failed to prove the reasonable cause. The assessee cannot simply shirk his responsibility by saying that there was delay on the part of the CA whereas we noticed that there was delay on the part of the assessee. It is the duty of the assessee to ensure that the CA is doing his job properly. The assessee should have enquired periodically or at least within a reasonable time as to whether the tax audit report signed/filed or not with the revenue authorities. In this case, the assessee has not established any correspondence between himself and the CA. As per the certificate of the CA, it is also clear that he could not complete the tax audit because assessee did not submit some papers/documents to him, (relevant portion of CA certificate is reproduced below: Due to want of some papers/documents the tax audit of said firm was c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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