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TMI Blog2014 (11) TMI 1285X X X X Extracts X X X X X X X X Extracts X X X X ..... that he had presented the return of income along with audit report before the AO at Bharatpur was placed or refusal by the officer at Bharatpur. In our view, mere justification as alleged without any supporting evidence, is no explanation and the Tribunal had rightly rejected the same. Turnover as per audit report and the turnover as noticed by the AO in the penalty order is not supported with cogent material on record. This discrepancy, when noticed, was expressed to the counsel for the assessee on the earlier date of hearing and specifically observed in the order-sheet of 13th Feb., 2014 but even after lapse of about 8 months on the date of final hearing, counsel for the assessee was unable to clarify the correct figures or the discrepancy noticed. However, ultimately insofar as imposition of penalty is concerned, the Act provides that it is minimum to the extent of Rs. 1 lac which ultimately has been imposed by the AO and sustained by the Tribunal. Though the assessee has tried to challenge that there was no information about transfer of cases from Bharatpur to Jaipur and S. 127 provides that notice is required to be served to the assessee but it can safely be observed that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dt. 13th Feb., 2007 on the following substantial question of law: "Whether the learned Tribunal was justified in sustaining the imposition of the penalty under S. 271B for furnishing the audit report after the date specified under S. 44AB to the changed jurisdictional AO in the facts and circumstances where the audit report under S. 44AB had been obtained on or before the specified date and the same was filed along with return of income under S. 139(4) more so where the learned Chief CIT or the CIT undisputedly has failed to comply with the statutory mandate enshrined in S. 127 to communicate the facts of changed jurisdiction to appellant?" 4. The DB IT Appeal No. 5 of 2007 was admitted vide order dt. 22nd March, 2007 on the following substantial question of law: "Whether on the facts and circumstances of the case, the Tribunal was justified in sustaining the imposition of penalty under S. 271B of the IT Act, 1961, despite the fact that the audit report was obtained under S. 44AB before specific date and the same was filed along with a return of income?" 5. The facts of all the three appeals would be dealt in a nutshell and thereafter legal issues would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over the case has been centralized with an officer at Jaipur but nothing more was conveyed and thus neither the return of income nor audit report was accepted and the return of income and audit report remained at assessee's office at Bharatpur and the assessee's office at Bharatpur had totally forgotten to submit return of income with the IT Department. However, on realizing the mistake and recollection, the return along with audit report was presented before the ITO, Bharatpur, who then accepted on 29th Jan., 1998. 8. The brief facts in the case of the appellant-assessee--M/s. Jaimal Ram & Party (DB IT Appeal No. 14 of 2007) are that it was being assessed to income tax by the AO, Bharatpur till asst. yr. 1996-97 and it, being an AOP popularly known as 'Hanumangarh Group', is carrying on. the business of liquor trading. During the previous year, since the turnover was exceeding Rs. 40 lacs, therefore, the assessee was required to get its accounts audited by a chartered accountant as required under S. 44AB of the IT Act, 1961. The due date of furnishing of the return of income under S. 139(1) of the FT Act so also the audited accounts, was on or before 31st Oct., 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the audit on 6th Oct., 1997, the same along with return of income, was presented before the AO, Bharatpur, but neither the return of income nor audit report was accepted and it was verbally conveyed that the jurisdiction over the case stood transferred to the Dy. CIT, Central Circle-2, Jaipur, which was not intimated and therefore, no penalty in law is leviable under S. 27 IB of the Act. 12. However, the AO was not satisfied with the explanation furnished and came to the conclusion that the assessee was well aware of the cases having been centralized in August, 1997. i.e. much before the due date of filing of the return. The AO was also of the view that the explanation appears to be an afterthought and no tangible evidence was placed on record so as to come to a conclusion that the return along with the audit report was presented on or before the due date of filing of the return at Bharatpur. The AO was also of the view that there was no reasonable cause or excuse and at least on the given facts stated the assessee was unable to prima facie satisfy and thus imposed penalty under S. 271B at Rs. 1 lac each in all the three cases as the said penalty was the minimum penalty pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the accounts audited in time and in presenting before the AO where it was being filed earlier. He contended that under S. 271B it is not incumbent upon the AO to impose penalty as the word used is "may" and it is discretion of the AO, or. a reasonable cause pleaded, not to impose penalty. He contended that reasonable cause do exists and the Tribunal wrongly sustained the penalty. He contended that no prejudice has been caused to the Revenue, even if the audit report has been filed late or the return was filed late as the assessment was completed after sufficient long time. He relied upon judgments, rendered in the cases of Rajasthan Co-operative Dairy Federation Ltd. v. Dy. CIT (2002) 176 CTR (Raj) 622 : (2003) 259 ITR 126 (Raj); Rajasthan State Electricity Board v. ITAT (2003) 183 CTR (Raj) 361 : (2003) 262 ITR 262 (Raj); Ajantha Industries v. CBDT 1976 CTR (SC) 79 : (1976) 102 ITR 281 (SC); CIT v. Apex Laboratories (P) Ltd. (2010) 320 ITR 498 (Mad); CIT v. K.K. Spun Pipe (2006) 200 CTR (P&H) 107 : (2006) 284 ITR 301 (P&H) and CIT v. Shri Shiv Dayal Sharma (DB IT Appeal No. 119 of 2006, decided on 13th Feb., 2007). 16. Per contra, learned counsel for the Revenue conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the nature referred to in S. 44B or S. 44BB or S. 44BBA or S. 44BBB, on and from the 1st April, 1985 or, as the case may be, the date on which the relevant section came into force, whichever is later: Provided further that in a case where such person is required by or under any other law to get his accounts audited, it shall be sufficient compliance with the provisions of this section if such person gets the accounts of such business or profession audited under such law before the specified date and furnishes by that date the report of the audit as required under such other law and a further report (by an accountant) in the form prescribed under this section. Explanation : For the purposes of this section, (i) 'accountant' shall have the same meaning as in the Explanation below sub-s. (2) of S. 288. (ii) 'specified date', in relation to the accounts of the previous year relevant to an assessment year means-- (a) where the assessee is a company, the 30th day of November of the assessment year,-- (b) in any other case, the 31st day of October of the assessment year. Sec. 271B. Failure to get accounts audited--If any person fails to get his accounts au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unts as well as return of income but what was contended, no tangible evidence or material either in the shape of an affidavit or otherwise of the person who claimed that he had presented the return of income along with audit report before the AO at Bharatpur was placed or refusal by the officer at Bharatpur. In our view, mere justification as alleged without any supporting evidence, is no explanation and the Tribunal had rightly rejected the same. 21. Though It may not be relevant but from the narration of facts, it can be inferred that the audit report, which has been annexed by counsel for the assessee, on an earlier query raised by this Court by way of an additional affidavit in the case of Shish Ram Raja Ram & Party (DB IT Appeal No. 15 of 2007) and on perusal of the audit report, it can be noticed that in the trading account, which is part of the audited accounts, the total sale has been declared at Rs. 4,85,35,759 and even if we consider other receipts i.e., rebate from distillery Rs. 3,09,028 and rebate from WS Rs. 30,07,429, then the total of all the three receipts (sale) is to the extent of Rs. 5,18,52,216 whereas the AO at least at two places in the penalty order states ..... X X X X Extracts X X X X X X X X Extracts X X X X
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