Case Law Details
Mudassir Rashid Ahmed Bakhla Makker & Co. Vs ITO (ITAT Mumbai)
The issue under consideration is whether penalty u/s 271B can be avoided if non-furnishing of Tax Audit Report is due to Bonafide reasons?
Brief facts are, in the course of assessment proceedings the Assessing Officer noticed that, though, the assessee is required to get his accounts audited under section 44AB of the Act and furnish the audit report electronically before the due date of return of income as per section 139(1) of the Act. However, the assessee has failed to do so. Therefore, he initiated proceeding for imposition of penalty under section 271B of the Act for non–furnishing the audit report.
ITAT have considered rival submissions and perused the material on record. As could be seen from the facts on record, by virtue of notifications issued by the CBDT in May and June 2013, for the first time the Board made it mandatory for online filing of tax audit report under section 44AB of the Act within the due date of filing of return of income. However, since the rule was implemented for the first time and the assessees were facing difficulty in filing the tax audit report electronically, the Board again clarified that assessees may file such tax audit report manually. In the facts of the present case, undisputedly, the assessee has obtained the tax audit report on 10th September 2013, i.e., much before the due date of filing of return of income. However, as stated by the assessee, due to lack of clarity and misinterpretation of the Circular issued by the Board, the assessee did not filed tax audit report before the due date of return of income. In our view, the aforesaid explanation furnished by the assessee appears to be plausible, therefore, benefit of doubt can be given to the assessee. A reading of section 273B of the Act makes it clear that imposition of penalty under section 271B of the Act is neither mandatory nor automatic. If the assessee satisfactorily explains the failure in complying with the statutory provisions, no penalty is to be imposed. In the present case, we are of the view that the failure on the part of the assessee in filing the tax audit report within the due date is due to bona fide reasons. Therefore, ITAT are inclined to delete the penalty imposed of Rs 1,50,000 under section 271B of the Act. Grounds raised by the assessee are allowed.
FULL TEXT OF THE ITAT JUDGEMENT
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