Demise of Chartered Accountant not a reasonable cause for not Auditing Books of Accounts: ITAT [Read Order]

Chartered Accountants - Central Govt - Quality Review Board - Taxscan

The demise of the Chartered Accountant of the assessee cannot be a ‘reasonable cause’ for not auditing books of accounts under the Income Tax Act, 1961, said the Cochin bench of the Income Tax Appellate Tribunal (ITAT).

In the instant case, no audit report has been filed for the assessment year 2009-2010. It is the contention of the assessee that there was a reasonable cause as mandated under Section 273B of the Income Tax Act.

The assessee contended that consequent to search and seizure operation, the entire books of account and records were taken by the department. Further, it was stated that the Chartered Accountant of the assessee was suffering from chronic illness and succumbed to illness on 09.03.2016. It was stated that the above two incidences had let to a situation of the books of account not being audited. The learned Departmental Representative supported the orders of the Income-tax authorities.

After hearing the rival contentions, the Tribunal noted that the search and seizure in assessee’s case were conducted on 06.01.2009.

“The assessee had obtained the copy of all the seized records. The demise of the Chartered Accountant in the year 2016 cannot be a reason for not auditing the books of account for the assessment year 2009-2010. Therefore, there was no reasonable cause as mandated u/s 273B of the Income Tax Act for deletion of the penalty imposed under section 271B for the assessment year 2009-2010,” the Tribunal held.

Subscribe Taxscan Premium to view the Judgment
taxscan-loader