The Chennai bench of the Income Tax Appellate Tribunal (ITAT) has recently held that no penalty should be imposed under Section 271B of the Income Tax Act 1961 on the reason of the return not appearing in the e-filing portal.
The assessee Jayaraj Charles filed the appeal against the order of the Commissioner of Income Tax (Appeals), in the matter of penalty levied under Section 271B of the Income Tax Act.
The penalty order alleged that the assessee failed to upload Tax Audit Report in Form No.3CB and 3CD within the prescribed time.
As per the records available, the assessee filed an audit report under Section 44AB Income Tax Act as well as its Income Tax Return on 17-03-2018.
The AO considered the provisions of Section 139(1) or 139(4) of the Income Tax Act and held that the return was treated as non-est and an invalid return. The extended due date for furnishing of Tax Audit Report was 07-11-2017 as per the press release dated 31-10-2017.
Aggrieved by the order assessee filed an appeal before the Commissioner of Income Tax (Appeals) who confirmed the action of the AO. Further, the assessee filed a second appeal before the tribunal
The Tax Audit has been completed in the assessee’s case on 07-11-2017 and a copy of the same was also furnished by the assessee during the course of assessment proceedings. It was uploaded by the assessee on 17-03-2018 along with the return of income.
It was observed by the tribunal that substantial compliance with the law was made by the assessee and the Tax Audit Report was obtained within the extended time limit. Its copy was also produced by the assessee during the course of the assessment proceedings.
Further observed that the return has been held to be non-est only because the same was not appearing on the e-filing portal possibly because the assessee did not verify the ITR-V.
Thus the two-member bench of V. Durga Rao, (Judicial Member) and Manoj Kumar Aggarwal,(Accountant Member) relied upon the decision of the Ramunaicker Raja vs. ACIT allowed the appeal filed by the assessee and observed that penalty should not be levied by reason of return not appearing on the e filing portal.
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