Filing of Income Tax Return along with Tax Audit Report: ITAT deletes Penalty of Rs 1 Lakh [Read Order]

The Income Tax Appellate Tribunal (ITAT), Chennai deleted penalty of Rupees one Lakh as there was proper filing of return of income along with tax audit report.

A survey under section 133A of the Act was conducted at the assessee’s,M/s. Saravana Foundation business premises and during the course of survey, it was found that the assessee has received gross receipt of around Rs 1.5 crores for every financial year starting from the financial year 2007-08 but has not filed its returns of income properly. As survey was conducted under section 133A of the Act, evidences were found in respect of escapement of income earned and in order to assess the escaped Income, the assessment for the assessment year 2008-09 to 2012-13 were reopened under section 147of the Act.

 For the assessment year 2011-12, notice under section 148 of the Act was issued to the assessee. In response to the notice, the assessee has filed its return of income admitting his income of Rs 6,81,745. Thereafter, notice under section 143(2) of the Act was issued to the assessee and was served on the assessee. After considering the submissions of the assessee, the Assessing Officer has completed the assessment under section 143(3) r.w.s. 147 of the Act and assessed the total income of the assessee at Rs 20,38,090 after making disallowance of expenditure claimed by the assessee.

In the assessment order, the Assessing Officer has also observed that as per the tax audit report filed along with the return of income, it was noticed that the books of accounts of the assesseewas audited by the Chartered Accountant. As per the provisions of section 44AB of the Act, the assessee has to get his accounts audited by the accountant but, the assessee got his account audited. As the assessee has failed to get his accounts audited, penalty under section 271B of the Act is liable to be levied.

A Division Bench consisting of V. Durga Rao, Judicial Member and G. Manjunatha, Accountant Member observed that “In the assessment order under section 143(3) r.w.s. 147 of the Act, the Assessing Officer as admitted that the assessee has filed the return of income along with tax audit report. Considering the explanations that the assessee was prevented by reasonable cause for the delay in filing the tax audit report under section 44AB of the Act, we are of the considered opinion that the penalty levied under section 271B of the Act is liable to be deleted.”

To Read the full text of the Order CLICK HERE

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