Tribunal modifies addition direction and deletes penalty under section 271B for assessment year 2009-2010

The Tribunal allowed the appeals of the assessee against the orders of the CIT(A) for the assessment year 2009-2010. It modified the direction regarding the addition in the hands of the assessee and deleted the penalty levied under section 271B of the Act.

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Issues:
1. Appeal against orders of CIT(A) for assessment year 2009-2010.
2. Addition of Rs. 27,14,906 in the hands of the assessee.
3. Confirmation of penalty under section 271B of the Act of Rs. 63,215.

Issue 1: Appeal against orders of CIT(A) for assessment year 2009-2010

The assessee filed appeals against separate orders of the CIT(A)-2, Bhubaneswar for the assessment year 2009-2010. The grounds of appeal included challenging the orders as improper, illegal, and excessive, invoking Sec. 147 of the IT Act, treatment of alleged cash deposits, addition of income on protective basis, and errors in confirming the assessment order. The CIT(A) directed the Assessing Officer to examine the addition in the hands of the assessee based on the outcome of the assessment in the case of the assessee's brother. The Tribunal modified the CIT(A) order, directing the Assessing Officer to adjudicate the issue of addition in the assessee's hands after providing a reasonable opportunity of hearing.

Issue 2: Addition of Rs. 27,14,906 in the hands of the assessee

The addition was made in the hands of the assessee protectively, mirroring the addition made in the hands of the assessee's brother. The CIT(A) directed the Assessing Officer to confirm the addition in the assessee's hands if the addition in the brother's hands was deleted, and vice versa. The Tribunal found the CIT(A)'s direction incorrect, stating that if the addition in the brother's hands is deleted, the Assessing Officer must assess whether the addition can be made in the assessee's hands. Consequently, the Tribunal allowed the grounds of appeal raised by the assessee.

Issue 3: Confirmation of penalty under section 271B of the Act of Rs. 63,215

The Assessing Officer levied a penalty under section 271B for failure to audit accounts and furnish the audit report within the prescribed time. The assessee contended that the audit report was obtained within the time limit under section 139(1) and was submitted when requested by the Assessing Officer. The Tribunal referred to a CBDT circular stating that no penalty should be levied if the audit report is obtained within the due date, and the report is furnished when required. As the revenue failed to show any violation of the circular, the Tribunal deemed the penalty untenable and deleted it, allowing the appeal of the assessee.

In conclusion, the Tribunal allowed the appeals of the assessee against the orders of the CIT(A) for the assessment year 2009-2010, modified the direction regarding the addition in the hands of the assessee, and deleted the penalty levied under section 271B of the Act.

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