TaxTMI 
TaxTMI 
2018 (5) TMI 1907
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....7. 2. The sole issue arising in the instant appeal is the validity in law of the levy of the said penalty in the facts and circumstances of the case. The background facts of the case are that the assessee-individual, a trader in paddy husk, filed his return of income for the relevant year on 31.03.2015, also uploading the tax audit report u/s. 44AB (dated 31.03.2015) on the same day. The same was, in terms of section 44AB, required to be obtained and furnished (to the Income Tax Department) by the due date of filing the return of income, i.e., by 30.09.2014. The contravention attracts penalty u/s. 271B, which reads as under: 'Failure to get accounts audited. 271B. If any person fails to get his accounts audited in respect of any pre....
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....hich - a matter of fact, though, is on the assessee. The assessee's case is lack of proper advice by his counsel, Shri Sanjeev Arora, Advocate. The argument is valid in principle as nobody can be expected to know the law and, further, as it has not been shown that the assessee's sales at any time in the past exceeded the threshold monetary limit required for tax audit. The Assessing Officer (AO) ought to have examined this aspect, particularly so as the monetary limit for tax audit prior to 01.04.2010 was much lower, i.e., at Rs. 40 lacs. An assessee would normally heed to the advice by his counsel, who, it is stated, failed to advise him in the matter. Surely, ignorance of law is no excuse, but, then, it needs to be borne in mind that we a....
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....ccounts) fell on 31.07.2013, the assessee would have, post AY 2012-13, only approached his Advocate for filing the return for that year sometime between April and July, 2013, i.e., as he would be doing in the past. The accounts for that year being also required to be audited under section 44AB, the latest that the assessee would therefore become aware of his obligation under law to get his accounts audited (and file the same with the Department) is by the end of July, 2013, allowing him a reasonable time to obtain the audit report (for AY 2013-14) and file the same by the due date therefor (u/s.44AB), i.e., 30.09.2013, and, in fact, also return his income for that year. Why, then, he did not do so? The ld. AR could not, on being asked durin....
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....is as no such requirement arose for those years. We, in fact, have already proceeded on the basis that the assessee was not aware of the obligation for tax audit - a matter of common knowledge among businessmen, so that nothing in fact turns thereon. The occasion for rendering advice would arise only when the assessee is preparing to file the return for AY 2013-14 and, in any case, for AY 2014-15. In fact, approaching the counsel in time for either year would make him aware of the requirement of law and, consequently, the penal consequence attending non-compliance. If anything, it shows that the assessee is aware - or stands made aware on seeking professional advice, of the last date for filing the return/s belatedly, and chooses to, for re....
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....t findings of the first and the second appellate authority. How is the said case law relevant? If anything, it shows that 'reasonableness' is a matter of fact, to be decided on appreciation of all the relevant facts. 3.4 We have, in fact, at the very outset, already stated that a reasonable cause is essentially a matter of fact - a cause (be it a fact or circumstance or both) that had led a man of ordinary prudence, acting with due diligence in regard to his affairs, to committing a default. And, further, proceeded on the basis of the assessee being unaware of the legal requirement - itself, highly improbable as the provision of section 44AB, coopted on the statute by Finance Act 1984, with effect from 01.04.1985, is by now 30 years old, ....