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TMI Blog2020 (2) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... ounts audited cannot be considered as failure on the part of the assessee as envisaged under the provisions of section 271B of the Act. Thus the delay in getting the accounts audited cannot attract the penalty provisions as specified under section 271B of the Act. We are of the view that the assessee cannot be visited to the penalty on account of delay in getting the accounts audited and furnishing the tax audit report in form 3CD under the provisions of section 44 AB of the Act. With the above observations, the orders of lower authorities are set aside and the penalty levied u/s 271B is deleted. - Decided in favour of assessee. - ITA No.2221/Ahd/2018, ITA No.2222/Ahd/2018 - - - Dated:- 30-1-2020 - Shri Mahavir Prasad, Judicial Member And Shri Waseem Ahmed, Accountant Member For the Appellant : Shri Mukund Bakshi, AR For the Respondent : Shri Vidhyut Trivedi, Sr.DR ORDER PER WASEEM AHMED, ACCOUNTANT MEMBER: The captioned appeals have been filed at the instance of the different Assessees against the separate orders of the Commissioner of Income Tax (Appeals) 5, Vadodara [CIT(A) in short] vide appeal nos.CIT(A), Vadodara- 5/10130 and 10068/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no response from the side of the assessee. Hence the AO levied the penalty of ₹ 1,50,000/- under the provisions of section 271B of the Act. Aggrieved assessee preferred an appeal to the learned CIT(A). 4.2. The assessee before the learned CIT(A) submitted that there were various incriminating documents relating to the receipts were found and impounded during the survey proceedings conducted under section 133A of the Act. As a result of discovery of incriminating documents during survey, the assessee got them accounted in the books of accounts which have taken considerable time. Therefore the assessee could not complete the books of accounts within the time which resulted delay in the audit of the accounts in the manner as specified under section 44AB of the Act. Accordingly the assessee claimed that there was reasonable cause which prevented to get its accounts audited and furnished the same within the time limit as specified under section 44AB of the Act. Accordingly the assessee prayed before the learned CIT (A) to provide immunity from the penalty imposed by the AO under section 44 AB of the Act in pursuance to the provisions of section 273B of the Act. 4.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specified under the provisions of law in the given facts and circumstances. 5.3. In view of the above, the learned AR for the assessee prayed to provide the immunity from the penalty for the default committed under section 44AB of the Act, in pursuance to the provisions of section 273B of the Act. 6. On the other hand, the Ld. DR before us vehemently supported the order of the authorities below. 7. We have heard the rival contentions and perused the materials available on record. The issue in the instant case is that the assessee did not get the books of account audited within the time as prescribed under the provision of section 44AB of the Act. 7.1. The AO levied the penalty under section 271B of the Act for not furnishing the audit report in form 3CD within the specified time. Undisputedly, the assessee could not get the accounts audited under section 44 AB of the Act within the specified time. However, the assessee has been provided immunity from such penalty under the provisions of section 273B of the Act if it proves that there was the reasonable cause for non-compliance of getting the books of accounts audited. Thus, the onus lies on the assessee to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing sufficient time in hand after date of the survey i.e. 29th October 2012 till the date of filing the return of income i.e. 31st October 2013. Hence, we reject the 1st contention of the learned AR in the present facts and circumstances. 7.5. The 2nd fold of contention of the learned AR is that the assessee was not aware about fact that it was under the obligation to treat the income disclosed during the survey proceedings as part of the turnover. Again the learned AR for the assessee, failed to substantiate his contention based on the documentary evidence. Just ignorance of the provisions of law, the assessee cannot take the benefit of non-compliance of the provisions as specified under the Act. In this regard we draw support and guidance from the judgment of Madras High Court in the case of Vishwanathan Silk Centre Vs. CIT reported in 203 ITR 131 wherein it was held that ignorance of law cannot be of sufficient reason. Hence, we reject the 2nd fold of contention raised by the assessee. 7.6. However, nevertheless it is important to note that there was no infirmity in such tax audit report as observed by the AO. As such the income declared by the assessee in its income t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at a specified amount in absolute terms or as a percentage of the tax involved or total income assessed to turnover or an amount relating to a transaction which gives rise to such default. By the same analogy, as in the case of section 271(1)(a ), 271(1)(b) and 271(1)(c), it was reasonable to conclude that under section 271B, the Legislature purported to punish a failure rather than a delay in complying with the statutory provisions. If a delay is to be visited with penalty under section 271B, it would mean that the penalty amount would be the same irrespective of the period of delay. In other words, delay of even one day will invite the same consequence as delay of one month or one year. Obviously such an interpretation was not warranted while applying the penal provisions. In this view of the matter also, what is sought to be penalised under section 271B was not delay but the absolute failure in getting the accounts audited or to obtain the report of such audit or to furnish such report. In the present case, the assessee did file the audit report along with the return, though the return was late by a short period of 15 days. Hence, in view of the legal position, pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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