TaxTMI 
TaxTMI 
2018 (6) TMI 599
X X X X Extracts X X X X
X X X X Extracts X X X X
....ted, 30.12.2014. 2. The grievances raised by the assessee read as under: "1. For that the order of penalty dated 30.12.2014 passed u/s 271B by the ITO is bad in law and is liable to be quashed. 2. For that on the facts and in the circumstances of the case, the ld. CIT(A) erred in upholding the penalty of Rs. 1,50,000/- imposed by the Assessing Officer u/s 271B. 3. For that on the facts and in the circumstances of the case, the ld. CIT(A) failed to consider the fact that penalty cannot be imposed where there is technical and venial breach of law particularly when the assessee had made substantial compliance of law. 4. That the appellant craves leave to add, alter or delete all or any of the grounds of appeal." 3. The brief fact....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssessee and held that the assessee did not submit audit report even manually within the prescribed due date on, 30/09/2073.The AO also noted that the assessee submitted the report before erstwhile lTO, Ward-1(2), Hooghly instead of the jurisdictional Assessing Officer and also failed to furnish the Audit Report electronically on or before 31.10.2013. Therefore, the Assessing Officer imposed penalty to the tune Rs. 1,50,000/- u/s 271B of the Act. 4. Aggrieved by the stand of the Assessing Officer, assessee carried the matter in appeal before the CIT(A) but without any success. The assessee is aggrieved and is in further appeal before this Tribunal. 5. Learned counsel for the assessee begins by pointing out that audit report for Assessment ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... appropriate to quote the provisions of section 271B of the Income Tax Act, which read as below: "Section 271B: Failure to get accounts audited. If any person fails to get his accounts audited in respect of any previous year or years relevant to an assessment year or furnish a report of such audit as required under s. 44AB, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum equal to one-half per cent of the total sales, turnover or gross receipts, as the case may be, in business, or of the gross receipts in profession, in such previous year or years or a sum of one hundred fifty thousand rupees, whichever is less." We may draw the conclusion from the plain language of section 271B of the Act, mentio....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... grappling with the computer system and sometimes the Computer-server of the Income Tax department did not work properly, therefore Chartered Accountants could not upload the tax audit report on the site and hence the assessee was forced to file the tax audit report manually on 08.10.2013, within the extended period by CBDT for filing tax audit report electronically. In these circumstances, we should not say that the assessee has failed to furnish the audit report U/s 139 (1) read with section 44AB of the Act, as the circumstances were beyond the control of the assessee. 8. We note that penalty is not mandatory under section 271B of the Act, because the word used in the said section is "may" that is,"............ the Assessing Officer may ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t the audited accounts before 30.09.2013 and the income tax return has been filed in time and, therefore, there is no prejudice caused to the Revenue. The technical and venial breach on the part of Chartered Accountant of the assessee, the assessee cannot be penalized. For the aforesaid reason, we rely on the judgment of the Hon'ble Supreme Court in the case of Hindustan Steel Ltd. Vs. State of Orissa in 83 ITR 26(SC) wherein it was held as under: "5. Under the Act penalty may be imposed for failure to register as a dealer: s. 9(1), r/w s. 25(1) (a) of the Act. But the liability to pay penalty does not arise merely upon proof of default in registering as a dealer. An order imposing penalty for failure to carry out a statutory obligation i....