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TMI Blog2023 (1) TMI 409X X X X Extracts X X X X X X X X Extracts X X X X ..... at there exists a reasonable cause within the meaning of section 273B of the Act which prevented the assessee in meeting the compliance requirement in respect of special audit u/s. 142(2A) of the Act. - Levy of penalty directed to be deleted. Decided in favour of assessee. - ITA Nos. 284 to 290/LKW/2020 , 270 to 276/LKW/2020 - - - Dated:- 26-12-2022 - SHRI MAHAVIR SINGH , VICE PRESIDENT AND SHRI GIRISH AGRAWAL , ACCOUNTANT MEMBER For the Appellant : Shri Rakesh Garg, Advocate For the Respondent : Shri Amit Nigam, DR ORDER Per Bench All the above captioned appeals filed by two different assessees are against the respective orders of Ld. CIT(A), Kanpur-4, Kanpur all dated 27.07.2020 u/s. 250(6) of the Income-tax Act, 1961 (hereinafter referred to as the Act ) passed against the penalty orders by the DCIT, Central Circle-1, Kanpur u/s. 271(1)(b) of the Act, all dated 27.03.2019. Since all the appeals relating to both the two assessees belong to one group of Rich Udyog Net Worth Ltd. and facts are identical, arising out of respective consolidated orders of Ld. CIT(A), we dispose of all these appeals by this consolidated order for the sake of convenience. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst which assessee filed its reply on 07.08.2018. Ld. AO passed the assessment order on 24.08.2018 u/s. 144 r.w.s. 153A of the Act by making various additions. Thereafter, Ld. AO issued notice u/s. 271(1)(b) of the Act to show cause as to why a penalty should not be levied against which assessee filed its submission dated 26.09.2018 requesting the Ld. AO to keep the penalty proceeding in abeyance until the disposal of appeal filed before the Ld. CIT(A)-IV, Kanpur against the assessment order. Ld. AO without taking into cognizance of the request of keeping the penalty proceeding in abeyance, proceeded to complete the penalty proceeding by levying a penalty of Rs. 10,000/- u/s. 271(1)(b) of the Act. Aggrieved, assessee went in appeal before the Ld. CIT(A), who confirmed the action of the Ld. AO. 3.2. While dismissing the appeal of the assessee, Ld. CIT(A) stated in para 9.1, various principles which are relevant in penalty imposition and are extracted as under: 9.1 Section 271(1)(b) of the Act lays down that if the Assessing officer, in the course of any proceeding under this Act, is satisfied that any person who has failed to comply with a direction under sub-section ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rse of assessment proceeding, assessee was prevented from producing the same before the Special Auditor for the conduct of the special audit u/s. 142(2A) of the Act and fulfil the statutory requirements. 6.1. He strongly submitted that the allegation of the ld. AO that books of account have not been maintained and assessee has not got his accounts audited as required u/s. 142(2A) of the Act in the captioned assessment years are misconceived as borne out from the facts on record from the noting of the order sheet entries. Accordingly, Ld. Counsel submitted that there exists reasonable cause within the meaning of section 273B of the Act and, therefore, the penalty so imposed is ought to be deleted. 7. Per contra, Ld. CIT, DR placed reliance on the orders of the authorities below. 8. We have heard the rival contentions and have carefully gone through the material available on record and have given our thoughtful consideration to the submissions made before us. Before adverting on the issue, we appraise ourselves with the relevant provisions of law which are reproduced hereunder: 271(1) If the Assessing officer or the Commissioner (Appeals) or the Principal Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordings of section 273B are explicit that a person who has failed to comply with the notice/direction must show reasonable cause for which onus is upon the assessee. We also take note of the observation made by the Ld. CIT(A) in respect of reasonable cause as mentioned in section 273B that reasonable cause as in law, prima facie meaning of reasonable with regards to those circumstances of which the actor, called on to act reasonably, knows or ought to know. Reasonable cause can be reasonably said to be a cause which prevents a man of average intelligence and ordinary prudence, acting under normal circumstances, without negligence or inaction or want of bonafide. 9.2. Reference is also made to the legal maxim 'impotentia excusat legam' and 'lex non cogit ad impossibilia' in this respect. When there is an invincible disability to perform mandatory part of the law that impotentia excuses. Law does not compel one to do that which one cannot possibly perform. Where the law creates a duty or charge and the party is disabled to perform it, without any default in him and has no remedy over it, there the law will, in general, excuse him. Therefore, when it appears t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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