The Mumbai Income tax appellate tribunal (ITAT) has recently held that income tax penalty could not be levied even if the audit was carried out after receipt of re-assessment notice.
Assessee Lata Keshao Thaokar in the assessment year 2011-2012 entered into purchase/sale of commodities through National/Multi Commodity Exchange to the extent of Rupees 90,34,03,800/-. But the assessee has already filed a return of income. Subsequently, assessing officer the provisions of section 147 of the Income Tax Act, 1961 were invoked and notices under section 148 of Income Tax Act 1961 were issued and served on the assessee. In response assessee filed return of income and declared nil .After verifying the submissions and records filed by the assessee assessing officer observed that the assessee has violated the provisions of section 44AB and imposed maximum penalty leviable u/s 271B of the Act .Aggrieved assesse filed an appeal before the ITAT.
Rajesh Shah Counsel for the assessee contented that assessee never filed her return of income. After receiving the notice for non filing return from the income tax department, the assessor approached Professional Chartered Accountants Firm for guidance and compliance. Thereupon after understanding the legality, of the transactions and necessity of the compliance, assessed audited accounts and filed return of income. Moreover Due to lack of information, legal knowledge assessee belatedly filed the income tax return of 2011-2012.
Manoj Kumar counsel for the revenue relied upon the decision of the authorities.
After considering the contentions of the both sides the division bench of the Aby T. Varkey, (Judicial Member) and Rifaur Rahman, (Accountant Member) allowed the appeal filed by the assessee and observed that,
“There is no difference between the return of income and assessed income. It clearly establishes that there is no ulterior motive in not filing the belated audit report in this case. It is only ignorance and misguidance.”
Further the bench found that the assessee has complied with the provisions of section 44AB by getting her accounts audited, even though it was carried out only upon issue of notice under section 148 of the Income Tax Act 1961.
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