Case Law Details
Attinkara Electronics Vs ITO (ITAT Cochin)
ITAT Cochin held that the delayed audit report, due to the illness of a partner and hardware damage, constituted a technical venial breach that did not result in any loss to the exchequer. The audit report was filed before the completion of the assessment proceedings, and the reasons provided by the appellant were deemed reasonable causes for the delay. Consequently, the ITAT concluded that the penalty under section 271B of the Income Tax Act was not applicable in this case.
The case of Attinkara Electronics vs ITO (ITAT Cochin) pertains to the assessment year 2012-13 and involves the levy of penalty under section 271B of the Income Tax Act. The appellant, Attinkara Electronics, failed to get its accounts audited as required by section 44AB of the Act before the specified date. The Assessing Officer imposed a penalty of Rs. 1,50,000 on the appellant for this failure.
The appellant provided two reasons for the delay in getting the accounts audited. Firstly, it claimed that the partner, Mr. Naushad S, was suffering from an illness called Lumbago Sciatica (Low Back Pain) from 20/09/2012 to 19/10/2012, which prevented the finalization of the books of accounts for audit. Secondly, it stated that there was a hardware damage to one of the desktop computers on 25/10/2012, resulting in the loss of all data. The appellant had to re-enter all the lost data, which took additional time considering the volume of sales and number of branches.
The Assessing Officer and the Commissioner of Income Tax (Appeals) (CIT(A)) upheld the penalty, stating that the appellant failed to prove reasonable cause for the delay. The CIT(A) observed that the claim of ill health of the partner was not valid since the delay was due to the loss of data caused by hardware damage, and the appellant did not provide evidence that it did not have accounts on any other computer or that the accounts were actually reconstructed.
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