Case Law Details
Sri. Dummi Shivraj Deepak Vs ITO (ITAT Bangalore)
No section 271B Penalty for not getting audited due to bonafide belief of non-applicability of Tax Audit
Admittedly, the assessee had got the books of account audited for the first time for the relevant assessment year. Prior to the relevant assessment year, the assessee was under the bonafide belief that only the gross commission receipts are to be taken as turnover for the purpose of audit. It was only during the course of assessment proceedings, the A.O. insisted for the books of account to be furnished and the same was directed to be audited. The assessee is in the business of mobile currency / mobile recharge vouchers. On identical facts, the Cuttack Bench of the Tribunal in the case of Sabita Panda v. ITO (supra) had held that when the assessee is under bonafide belief that the entire payment for the purchase of recharge coupons is not to be included as part of the turnover for the purpose of provisions of section 44AB of the I.T. Act. the same constitute a `reasonable cause’ as mandated u/s 273B of the I.T. Act for not getting the books of account audited.
A similar view has also been held by the Delhi Bench of the Tribunal in the case of Anoop Kumar Beri v. ACIT (supra). Moreover, in the instant case, the audit report has been furnished on 15.05.2019, i.e., prior to the completion of the assessment (Assessment order u/s 143(3) of the I.T. Act was completed on 18.12.2019). Therefore, the A.O. had the benefit of audit report in completing the assessment. In such circumstances, the Cochin Bench of the Tribunal in the case of Attinkara Electronics v. ITO in ITA No.601/Coch/2018 (order dated 01.03.2019) had held that there is no loss to the exchequer and the default is only venial breach and deleted the penalty imposed u/s 271B of the I.T. Act. For the aforesaid reasoning and the judicial pronouncements, cited supra, we delete the penalty imposed u/s 271B of the I.T. Act.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
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