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TMI Blog2024 (8) TMI 422X X X X Extracts X X X X X X X X Extracts X X X X ..... , ACCOUNTANT MEMBER For the Appellant by : Shri J. Saravanan, Advocate For the Respondent by : Shri G. Suresh, JCIT ORDER PER MAHAVIR SINGH, VICE PRESIDENT: This appeal by the assessee is arising out of the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi in Order No. ITBA/NFAC/S/250/2023-24/1060617906(1) dated 07.02.2024. The assessment was framed by the Addl. / Joint / Deputy /Asst. Commissioner of Income Tax /Income Tax Officer, National Faceless Assessment Centre, Delhi for the assessment year 2017-18 u/s.147 r.w.s.144B of the Income Tax Act, 1961 (hereinafter the Act ) vide order dated 29.03.2022. The impugned penalty u/s.271B of the Act, under dispute was levied by the Assessing Officer, Non-Corporate Circle-2, Madurai vide order dated 09.09.2022. 2. The only issue in the appeal of the assessee is as regards to order of the Ld. CIT(A) confirming penalty levied by the Assessing Officer u/s. 271B of the Act for violation of the provisions of section 44AB of the Act for not filing the audit report. For this, the assessee has raised following the grounds:- For that the order of the Ld. Commissioner of Income-Tax (Appeals), NF ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue to litigations and business problems, the Audit Report u/s 44AB could not be submitted in time. This justification of the assessee cannot be accepted. Penalty proceedings u/s 271B are initiated for failure to comply to the provisions of section 44AB of the Act. The Assessing Officer initiated penalty proceedings and issued show cause notice dated 29.03.2022 as to why penalty be not levied u/s.271B of the Act. In reply dated 22.04.2022, the assessee has stated as under:- it is an infant sick company due to various factors and had incurred huge losses/and result in our failing to meet the obligations to our workers, suppliers etc and major portion of our time was spent in litigations, running after funds to procure inputs for the plant, without which, all our activities would cease, we were unable to concentrate in filing of audit report u/s.44AB of the Act. Hence, requested to drop the penalty proceedings initiated u/s.274 rws 271 B of the Act. The Assessing Officer noted that the assessee has not filed audit report u/s.44AB of the Act, though the assessee s total turnover was amounting to Rs. 10,05,74,574/- during the financial year 2016-17 relevant to the assessment year 2017-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t years 2014-15 to 2022-23, except this assessment year 2017-18. The another argument of the assessee was that it has spent lot of money in attending litigation cases called by long default running after funds to procure inputs for the company plant without which company operations would have come to standstill and due to these reasons the assessee missed out filing of audit report u/s. 44AB within the due date of filing of such return. 6. The learned DR opposed for deletion of penalty, because no reasonable and sufficient cause was adduced by the assessee. He argued that the reason stated goes against the assessee for the reason that the assessee for all the assessment years from 2014-15 to 2022-23, filed audit report in time. But, in this assessment year 2017-18 only, the assessee has not filed the audit report and no plausible reason was adduced. 7. Heard rival contentions and gone through records of this case. First of all, the assessee has not furnished any evidence to show that the assessee was attending to litigations and he was long defaulter running after the funds to procure company inputs. Secondly, the assessee knows the legal provisions for filing of audit report which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been filed on 05.03.2016, which is before the date of completion of assessment proceedings u/s.143(3) of the Act. In other words, although the assessee has filed tax audit report beyond the stipulated period, but such tax audit report was made available to the AO before he completes assessment proceedings. The assessee has given reasons for delay in filing tax audit report. As per which, the audit of accounts of society done by the Dept. of Cooperative Audit, could not be completed on or before 31.10.2015 and said delay was not in the hands of the assessee. Therefore, there is a reasonable cause for not filing the tax audit report within prescribed time limit ad thus, penalty cannot be levied. We find merits in the submission of the assessee for the simple reason that non-filing of audit report within the due date is a venial technical breach without any mala fide intention on the part of the assessee. Because, completion of audit of books of accounts of the society is under the control of Dept. of Cooperative Audit and thus, unless the Dept. of Cooperative Audit completes audit, the assessee cannot file return of income along with tax audit report. Therefore, we are of the co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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