TaxTMI 
TaxTMI 
2020 (2) TMI 84
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....r. 2. First, we take up assessee's appeal in ITA No. 2221/Ahd/2018 for AY 2013-14 in the case of M/s Shreenathji Realty. The assessee has raised the following grounds of appeal:- 1. The Ld. Commissioner of Income Tax (Appeals)-5, Vadodara has erred in law and in facts in confirming the action of the Ld.A.O. in Levying penalty to the extent of Rs. 1,37,500/- u/s.271B of the Act ignoring the facts and circumstances of the case. The levy of penalty of Rs. 1,37,500/- is bad in law and in facts is prayed to be cancelled. 2. Your appellant craves liberty to add, alter, delete or substitute any of the grounds of appeal hereinabove contained. 3. The effective issue raised by the assessee is that the Ld. CIT(A) erred in confirming the penalty for a sum of Rs. 1,37,500.00 levied by the AO u/s 271B of the Act. 4. The brief facts of the case are that the assessee is a partnership firm and engaged in the business of land dealings and real estate development. There was a survey operation conducted under section 133A of the Act dated 29-10-2012. The assessee during the survey proceedings admitted undisclosed/unaccounted income of Rs. 2.03 crores which was also offered to tax in the income....
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.... Being aggrieved by the order of the Ld. CIT-A, the assessee is in appeal before us. 5. The Ld. AR before us submitted that the purpose of the tax audit under section 44AB of the Act was to ensure that the informations furnished by the assessee in the income tax return are correct so as to save the time of the income tax officers in carrying out routine verifications of the purchases and sales shown in the financial statements. In the present case, the income disclosed by the assessee in its return of income was accepted without any variation in the assessment framed under section 143(3) of the Act. Thus, the object of the tax audit report as specified in the CBDT circular bearing No. 387 dated 6 July 1984 was achieved. 5.1. The learned AR also claimed that the assessee's turnover from the disclosed sources for the year under consideration was Rs. 72 lakhs only whereas it was liable to get accounts audited under section 44AB of the Act, in the event where the turnover was in excess of Rs. 1 crore. Accordingly the assessee was under the bona fides believe that it is not liable to get the accounts audited under section 44AB of the Act. Moreover, the assessee was also under the bona....
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....retation favourable to the assessee should be adopted. It is the duty of the authority concerned to take a reasonable view and not to reach a conclusion arbitrarily or capriciously. In Addl. CIT v. Mohammed & Sons [1985] 154 ITR 220, the Rajasthan High Court said: 'Before a cause can be said to be reasonable or not, it must be found on a fact that a particular cause operated upon the mind of the assessee which prevented him from filing the return in time. The onus is on the assessee to show that he was prevented by sufficient cause from complying with the statutory requirement of filing return in time and it is for the authority concerned to be satisfied that the cause shown is a reasonable cause'. In this decision, the Court also held that 'sufficient cause' or 'reasonable cause' cannot virtually be the same shade of meaning and that there is no substantial difference between the two expressions. 7.3. Now we apply the aforesaid principles in the present facts of the case whether there was sufficient cause for the non-compliance of the statutory provision as provided under section 44AB read with section 271B of the Act. In this regard we note that the asse....
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....out pointing out any defect. 7.7. In holding so, we draw support and guidance from the order of Amritsar tribunal in the case of ITO versus Bindra Ban Bansi Lal reported in 78 ITD 228 wherein it was held as under: "There was no difference between the returned income and the finally assessed income. Admittedly, there was no loss of revenue to the Government. Under section 271B the Assessing Officer is vested with discretion either to impose or not to impose penalty depending upon the facts and the circumstances of the case. No doubt, discretion should be exercised judicially and not arbitrarily. It is well settled law that when there is a technical or venial breach of the provisions of law, the ends of justice require that discretion should not be exercised in favour of punishing a minor default. Taking into consideration the relevant facts of the case, the Assessing Officer should not have imposed penalty under section 271B." 7.8. We also note that the delay in getting the books of accounts audited cannot be considered as failure on the part of the assessee as envisaged under the provisions of section 271B of the Act. Thus the delay in getting the accounts audited cannot attrac....