Case Law Details
Apeejay Education Society Vs DCIT (ITAT Chandigarh)
ITAT Chandigarh held that imposition of penalty u/s. 271(1)(b) of the Income Tax Act unjustified as special audit completed u/s. 142(2A) and audit report submitted within the extended time limit provide by AO.
Facts- The present appeal is filed by the appellant against the order of CIT(A), whereby, penalty u/s. 271(1)(b) of the Income Tax Act is upheld. Notably, the penalty u/s. 271(1)(b) is imposed on the appellant for not complying with the directions for special audit under section 142(2A) of the Income Tax Act issued by the Assessing Officer.
Conclusion- Held that the assessee, felt aggrieved with the action of the AO in directing the special audit, had moved a writ petition before the Hon’ble Punjab and Haryana High Court. The AO was very much ceased of the said matter and even the special auditors were informed about the same. Therefore, where the assessee is seeking a legal remedy available under the law against the action of the AO in ordering the special audit, the time taken from filing the writ petition to the disposal of the writ petition (even though no stay was granted) by the Hon’ble High Court deserve to be excluded. Apparently, considering the same where the AO has extended the time limit for submitting the report of the special auditor, the same cannot be held against the assessee.
The Special audit has been completed u/s 142(2A) and the audit report has been submitted on 21.06.2019 which is well before within the extended time limit provided by the AO i.e, by 25.06.2019, therefore, there is no basis to fasten the charge on the assessee that there is violation of directions issued u/s 142(2A) of the Act.
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