TaxTMI 
TaxTMI 
2020 (6) TMI 473
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.... reads as under:- "2. For that the penalty notice dated 15.05.2018 issued under section 274 r.w.s 271B being vague and unspecific, the penalty order passed in pursuance thereto is untenable and bad in law. 3. For that the initiation of penalty proceedings in the instant case for imposing penalty under section 271B is without jurisdiction and bad in law and consequently, the penalty order passed in pursuance thereto is void. 7. For that on the fact that the audit of immediately preceding assessment year having been completed on 23.03.2016, the ld. CIT(A) ought to have hold that the audit for the year under consideration completed on 28.03.2016 was due to reasonable cause as envisaged under section 273B of the Act a....
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....sessee the left the services without finalizing the accounts and another accountant was appointed in his place that resulted in delay in finalizing accounts as well as getting the accountants audited and hence caused delay in submission of Audit Report. 3. The explanation submitted by the assessee not acceptable penalty u/s 271 B of the Income Tax Act 1961 is hereby imposed. 4. In this background penalty u/ s 271 B @ 0.50% or Rs. 1,50,000/- of the total turnover whichever in less, the gross receipt of the assessee Rs. 2,08,57,841/- and penalty U/s 271 B of the Income Tax Act, 1961 is levied at Rs. 1,04,289/- with the prior approval of the Joint Commissioner of Income Tax for not obtaining and furnishing audit report before....
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....quired under section 44AB of the Income Tax Act, '1961. You are hereby requested to appear before m either personally or through a duly authorised representative at 11:00 AM on 251051 018 and show cause why an order imposing a penalty on you should to not be made under section 271B of the Income Tax Act, 1961 If you do not wish to avail yourself of this opportunity of being hard in person or through authorised representative you may show cause !n writing on or before the said date which will be considered before any such order is made under section 271B of the Income Tax Act, 1961" 6. In order to bolster his above contention the ld.AR relied on the order of the Delhi Tribunal (ITAT Delhi) in the case of M/s. Parkins....
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.... TAR on 31-03-2016 along with return of income. Therefore, according to the ld. AR there was reasonable cause for not filing the tax audit report (TAR) within the stipulated time i.e by 30-09-2015. However, according to ld. AR the AO has not given any reason for rejecting the explanation as given by the assessee and in the first appellate order, the ld. CIT(A) also has brushed aside this explanation of assesse on surmises and conjectures. According to the ld.AR, similar explanation for delay in filing TAR (Tax Audit Report) was taken up by the assessee before Ahmedabad Bench of this Tribunal [ Third Member ] case of ACIT Vs. Kamlesh R. Agarwal (HUF) reported in (2006) 99 ITD 27 (Ahd. TM), wherein it was held to constitute reasonable cause f....
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....efore, no adverse view need to be drawn against the revenue. He also submitted that assessee's explanation for delay in filing TAR (Tax Audit Report) of this year was because of not getting the earlier year accounts audited cannot be accepted as a reasonable cause as observed by the ld. CIT(A) in his order and therefore, he wants us not to interfere in the order of the ld. CIT(A). 10. We have heard both the parties and perused the records. We note that the assessee had filed return of income for the AY 2015-16 on 31-03-2016 along with TAR. Thereafter, we note the department accepted the return of income filed by the assessee by issuing intimation u/s. 143(1) of the Act on 28-05-2016. After two years on 15-05-2018, the AO had issued notic....
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....ion of Karnataka High Court was challenged by the Revenue before the Hon'ble Apex Court, and the Hon'ble Supreme Court has dismissed the SLP. Therefore, applying the ratio-dicedenti in SSA's Emerald Meadows & M/s. Parkinson (supra), we are of the view that the notice issued by AO before levying penalty u/s. 271B of the Act is bad in law. 12. Moreover, we note that the assessee had furnished the TAR belatedly on 31-03-2016 along with the return of income, which has been accepted by the department and intimation u/s. 143(1) of the Act has been issued. Pursuant to the show cause notice before imposing penalty, the assessee had explained before the AO the cause for delay in filing the TAR. The assessee explained that delay happened due to th....