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TMI Blog2024 (12) TMI 876X X X X Extracts X X X X X X X X Extracts X X X X ..... , of the existence of a state of circumstances, which assuming them to be true, would reasonably lead any ordinary prudent and cautious man, placed in the position of the person concerned, to come to the conclusion that the same was the right thing to do. As in the present case from the conduct, behavior and attitude of the assessee, it is clear that as this was the first year of the audit and the assessee had also not filed any returns of income for the earlier years as the income was way below the maximum amount not chargeable to tax, the assessee was not aware that the audit report was required to be filed on or before due dates. There was a delay in identifying a CA for carrying out the Audit finally obtained the audit report on 30/03/2019. The main crux for the delay was that the assessee was on an honest bonafide belief that there is no due date for filing the audit report separately and the same can be filed along with the return of Income within the time prescribed u/s 139(4) of the Act. We have also perused the Assessment record and found that the assessee has only committed a technical breach without any loss to the exchequer of the Government as there was no addition mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs. 2. At the outset, the ld. AR of the assessee submitted that there is a short delay of 8 days in filing the appeal before this Tribunal. On perusal of the record, we find that the assessee has filed an affidavit dated 14/11/2024 sworn before the Notary Public stating the reason for delay in filing the appeal, which is reproduced below: 2.1 Accordingly, the ld. A.R. for the assessee prayed that delay was due to reasons beyond the control of the assessee and neither intentional, willful nor deliberate on the part of assessee and prayed to condone the delay and admit the appeal for adjudication. 3. The ld. DR on the one hand though opposed for the condonation of delay but could not controvert the submissions made therein. 4. We have heard the rival submissions and perused the materials available on record. In our opinion, it cannot be said that assessee is very callous in its approach in filing the appeal before us. 4.1 At this juncture, it is appropriate to mention the judgment of the Apex Court in the case of Collector, Land Acquisition v. Mst. Ka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 30/03/2019 reporting a taxable income of Rs. 13,56,930/-. Thereafter, the assessee's case was selected for scrutiny through CASS and in course of the assessment proceedings, the assessee furnished all the details and particulars as called for by the AO. After verification of the details submitted by the assessee, the assessment proceedings were concluded by passing the order u/s. 143[3] of the Act, dated 09/12/2019, accepting the returned income amounting to Rs. 13,56,930/-. Further during the course of the assessment proceedings it was observed by the AO that during the F.Y. 2016-17 relevant to Assessment year 2017-18 the assessee has a turnover of Rs. 2,64,91,145/- from its business, as such he has to get his accounts audited as per provisions contained in section 44AB of the Act on or before 30.09.2017 (Extended upto 31.10.2017) and upload the tax audit report on e-filing portal on or before that date. However, the assessee got his accounts audited only on 30.03.2019 hence the AO initiated the penalty proceedings on or before completion of the Assessment proceedings U/s 271B for not filing the audit report within the due date. 5.1 Thereafter, the ITO, Ward-4(2)(4), Banga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olding that the ignorance of the law can never be an excuse to avoid legal penal action. The court presumes that every person is aware of the law and hence cannot claim ignorance. It has been held that the assessee is not permitted to plead ignorance as a defense to escape the rigors of the law, if it so, it is very easy for any person to put forward ignorance as a defense. 6. Aggrieved by the order of penalty dated 24/08/2021 passed u/s 271B of the Act, by the AO/NFAC, Delhi, the assessee preferred an appeal before the ld. CIT(A)/NFAC. The Ld. CIT(A)/NFAC dismissed the appeal of the assessee holding that the assessee has made same submission and the reply submitted cannot be considered logical for the purpose of reasonable cause . It is clear that there is no technicality involved in the reason stated by the assessee. Further, the ld. CIT(A) concluded that a person who is unaware of the law may not escape liability for violating that law merely by being unaware of its content and also hold that the case of the assessee does not come under the purview of the reasonable cause as provided in section 273B of the Act. 6.1 Aggrieved by the order of the ld. CIT(A), the assessee has filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... curred for expenditure, in cash, during the previous year does not exceed five per cent of the said payment, this clause shall have effect as if for the words one crore rupees , the words [ten] crore rupees had been substituted:] [Provided further that for the purposes of this clause, the payment or receipt, as the case may be, by a cheque drawn on a bank or by a bank draft, which is not account payee, shall be deemed to be the payment or receipt, as the case may be, in cash; or] (b) carrying on profession shall, if his gross receipts in profession exceed fifty lakh rupees in any previous year; or (c) carrying on the business shall, if the profits and gains from the business are deemed to be the profits and gains of such person under section 44AE or section 44BB or section 44BBB, as the case may be, and he has claimed his income to be lower than the profits or gains so deemed to be the profits and gains of his business, as the case may be, in any previous year; or (d) carrying on the profession shall, if the profits and gains from the profession are deemed to be the profits and gains of such person under section 44ADA and he has claimed such income to be lower than the profits and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [furnish a report of such audit as required under section 44-AB] [ Substituted by Act 22 of 1995, Section 48, for certain words (w.e.f. 1.7.1995).], the [Assessing Officer] [ Substituted by Act 4 of 1988, Section 2, for Income-tax Officer (w.e.f. 1.4.1988).] may direct that such person shall pay, by way of penalty, a sum equal to one-half per cent. of the total sales, turnover or gross receipts, as the case may be, in business, or of the gross receipts in profession, in such previous year or years or a sum of one hundred thousand rupees, whichever is less. 273B. [ Penalty not to be imposed in certain cases. - Notwithstanding anything contained in the provisions of [clause (b) of subsection (1) of] [section 271, section 271-A] [Substituted by Act 4 of 1988, Section 114, for section 270, clause (a) or Clause (b) of sub-Section (1) of section 271, section 271-A, section 271-B, sub-Section (2) of section 272-A, sub-Section (1) of section 272-AA, sub-Section (1) of section 272-B (w.e.f. 1.4.1989).][, section 271- AA] [ Inserted by Act 14 of 2001, Section 94 (w.e.f. 1.4.2002).][, section 271 B, ] [Inserted by Act 46 of 1986, Section 26 (w.e.f. 10.9.1986).][section 271- BA] [Inserted by A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cluding section 271B, no penalty shall be imposable on the person or the assessee, as the case may be, for failure referred to in the said provisions, if he proves that there was reasonable cause for the said failure. A clause beginning with notwithstanding anything is sometimes appended to a section in the beginning with a view to give the enacting part of the section in case of conflict, an overriding effect over the provision or Act mentioned in the non obstante clause. A non obstante clause may be used as a legislative device to modify the ambit of the provision or law mentioned in the non obstante clause, or to override it in specified circumstances. The true effect of the non obstante clause is that in spite of the provision or the Act mentioned in the non obstante clause, the enactment following it will have its full operation or that the provisions embraced in the non obstante clause will not be an impediment for the operation of the enactment. Therefore, in order to bring in application of section 271B in the backdrop of section 273B, absence of reasonable cause, existence of which has to be established by the assessee, is the sine qua non. 11. Levy of penalty under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee has only committed a technical breach without any loss to the exchequer of the Government as there was no addition made by the Ld.AO during the assessment proceeding. The AO has also observed that the case is audited u/s 44AB of the Act. The AO after considering the audit report, bank statements, cash books submitted by the assessee in support of his business had concluded the assessment proceedings by accepting the returned income of Rs. 13,56,930/-. This Tribunal have also taken a consistent view that when the tax audit report was made available to AO before completion of the assessment proceedings, then for technical venial breach without any malafide intention, penalty cannot be levied u/s 271B of the Act. 12.2 Further there is nothing contrary that has been brought on record by the Ld. DR at the time of the hearing. We are of the opinion that the assessee has only committed a technical breach without any loss to the exchequer of the Government. 12.3 Above being the position, the ld. CIT(A)/NFAC s non-consideration of the plea raised by the assessee about the existence of reasonable cause vitiate the order. On that score, we find the order passed by the ld. CIT(A)/NFAC t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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