PNEUMECH ENGINEERS, MUMBAI v. I.T.O. WD.18(1)(3), MUMBAI

ITA 1375/MUM/2009 | 2005-2006
Pronouncement Date: 28-01-2010 | Result: Allowed

Appeal Details

RSA Number 137519914 RSA 2009
Bench Mumbai
Appeal Number ITA 1375/MUM/2009
Duration Of Justice 10 month(s) 28 day(s)
Appellant PNEUMECH ENGINEERS, MUMBAI
Respondent I.T.O. WD.18(1)(3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 28-01-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 28-01-2010
Assessment Year 2005-2006
Appeal Filed On 02-03-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C: MUMBAI BEFORE SHRI. P.M. JAGTAP (AM) AND SHRI R.S. PADVEKAR (JM) ITA NO. 1375/MUM/2009 (ASSTT. YEAR : 2005-06) M/S. PNEUMECH ENGINEERS APPELLANT 435 KALYANDAS UDYOG BHAVAN NEAR CENTURY BAZAR PRABHADEVI MUMBAI- 400025 V/S. THE I.T.O WD. 18(1)(3) RESPONDENT FIRST FLOOR PIRAMAL CHAMBERS MUMBAI 400 012 APPELLANT BY : SHRI D.H. SAVE RESPONDENT BY : SHRI CHANDRA R AMAKRISHNAN : O R D E R : PER R.S. PADVEKAR J.M THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE IMPUGNED ORDER OF THE LD CIT(A)-XVIII MUMBAI DATED 7.11.2008 FOR T HE A.Y. 2005-06. 2. THE ONLY ISSUE BEFORE US IS WHETHER THE A.O IS J USTIFIED TO LEVY THE PENALTY OF RS. 30 912/- U/S. 271B FOR THE VIOLATIO N OF SEC. 44AB OF THE ACT. 3. THE FACT WHICH REVEAL FROM THE RECORD ARE AS UN DER : THE ASSESSEE FILED THE RETURN OF INCOME FOR THE A. Y. 2005-06 ON 12.4.2006 DECLARING A TOTAL INCOME OF RS. 55 879/-. THERE IS NO DISPUTE ABOUT THE FACT THAT THE PROVISIONS OF SECTION 44AB OF THE ACT ARE APPLICABLE TO THE ASSESSEE FOR THIS ASSESSMENT YEAR AS THE TOTAL TURN OVER OF THE ASSESSEE IS OF RS.61 82 429/- WHICH IS ADMITTEDLY MORE THAN RS. 40 LAKHS. AS PER THE PROVISIONS OF SECTION 44AB THERE IS A STATUTORY OB LIGATION ON THE ASSESSEE TO GET IS ACCOUNTS DULY AUDITED AND ALSO TO FURNISH TH E TAX AUDIT REPORT BEFORE THE ITA NO.1375/MUM/2009 2 DUE DATE OF FILING OF THE RETURN OF INCOME IF THE TOTAL TURNOVER OF THE ASSESSEE EXCEEDS RS. 40 LAKHS. AS THE ASSESSEE DID NOT FURN ISH THE TAX AUDIT REPORT BEFORE 31.10.2005 WHICH WAS THE DUE DATE FOR FILING OF THE RETURN OF INCOME FOR THE A.Y. 2005-06. THE A.O ISSUED THE SHOW CAUSE NOT ICE DT. 2.4.2007 SEEKING THE EXPLANATION OF THE ASSESSEE WHY THE PENALTY SHO ULD NOT BE LEVIED U/S. 271B OF THE I.T. ACT. THE ASSESSEE FILED THE REPLY DT. 7.4.2007 TO THE A.O. IN THE REPLY IT WAS CONTENDED BY THE ASSESSEE THAT DU E TO THE HEAVY RAINING THERE WAS FLOODS IN MUMBAI ON 26 TH JULY 2005 AND THE BOOKS OF ACCOUNTS AND ALL THE RELEVANT DOCUMENTS LIKE PURCHASE BILLS ETC. WERE DAMAGED AND DUE TO THAT THE ASSESSEE FACED LOT OF PROBLEMS FOR COLLECT ING THE RELEVANT DOCUMENTS AND OTHER THINGS AND HENCE THERE WAS A DELAY IN F URNISHING THE REPORT. THE A.O WAS NOT CONVINCED WITH THE EXPLANATION OF THE A SSESSEE AS IN HIS OPINION IT WAS NOT REASONABLE CAUSE AS THE AUDIT REPORT WAS SIGNED ON 28.10.2005 THE A.O. LEVIED THE PENALTY OF RS. 30 912/-. THE ASSES SEE CHALLENGED THE SAME BEFORE THE LD CIT(A) BUT WITHOUT SUCCESS. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE PARTIES. THE FACTS ARE NOT IN DISPUTE. THE CONTENTION OF THE ASSESSEE THAT THERE WAS A FLOOD AND HENCE T HE ENTIRE RECORD WAS DAMAGED. THE LD COUNSEL ALSO RELIED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD. V/S. STATE OF O RISSA-83 ITR 26(S.C.). IN THE CASE OF HINDUSTAN STEEL LTD. (SUPRA) THE HONBLE SUPREME COURT HAS HELD AS UNDER : AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OU T A STATUTORY OBLIGATION IS THE RESULT OF A QUASI-CRIMINAL PROCEE DING AND PENALTY WILL NOT ORDINARILY BE IMPOSED UNLESS THE PARTY OBLIGED EITHER ACTED DELIBERATELY IN DEFIANCE OF LAW OR WAS GUILTY TO CO NDUCT CONTUMACIOUS OR DISHONEST OR ACTED IN CONSCIOUS DISREGARD OF ITS O BLIGATION. PENALTY WILL NOT ALSO BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENALTY SHOULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF THE AUTHORITY TO BE EX ERCISED TO BE EXERCISED JUDICIALLY AND ON A CONSIDERATION OF ALL THE RELEVA NT CIRCUMSTANCES. EVEN IF A MINIMUM PENALTY IS PRESCRIBED THE AUTHORITY C OMPETENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF T HE ACT OR WHERE THE BREACH FLOWS FROM A BONA FIDE BELIEF THAT THE OFFEN DER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE. 5. WE HAVE PERUSED THE ORDER OF THE A.O LEVYING THE PENALTY. IT IS NOT THE CASE OF THE A.O THAT THE ACT OF THE ASSESSEE IS DEL IBERATE OR ACTED IN CONSCIOUS ITA NO.1375/MUM/2009 3 DISREGARD OF ITS OBLIGATION. AS THE PENALTY PROCEE DINGS LIKE THE PRESENT ONE IS QUASI CRIMINAL PROCEEDINGS THE A.O HAS TO MAKE OUT THE CASE THAT IT WAS A DELIBERATE ACT OF THE ASSESSEE. MERELY BECAUSE TH E ASSESSEE DID NOT FURNISH THE REPORT BEFORE THE DUE DATE OF FILING OF THE RET URN THAT MAY NOT AUTOMATICALLY ATTRACT THE PENALTY. IN OUR OPINION THERE IS NO JUSTIFICATION TO LEVY THE PENALTY ON THE FACTS OF THIS CASE. WE AC CORDINGLY DELETE THE SAME AND CANCEL THE PENALTY ORDER. 6. IN THE RESULT ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28TH DAY OF JANUARY 2010. SD/- SD/- (P.M. JAGTAP) (R.S. PADVEKAR) ACCOUNTANT MEMBER JUDICIA L MEMBER MUMBAI ON THIS 28TH DAY OF JANUARY 2010. :US COPY TO: 1. APPELLANT 2. RESPONDENT 3.THE CIT(A)-XVIII MUMBAI 4.THE CIT M.C.XVIII MUMBAI 5.THE DR C BENCH MUMBAI 6.GUARD FILE BY ORDER TRUE COPY ASSTT..REGISTRAR ITAT MUMBAI. ITA NO.1375/MUM/2009 4 US DATE INITIALS 1. DRAFT DICTATED ON 13/1/10 --------------- SR.P.S . 2. DRAFT PLACED BEFORE AUTHORITY 14/1/10 -------- ------ SR.P.S. 3. DRAFT PROPOSED & PLACED ----------- ---------- --- JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED ----------- ----------- -- JM/AM BY SECOND MEMBER 5. APPROVED DRAFT COMES TO ----------- ------------ - SR.P.S. THE SR. P.S./P.S 6. KEPT FOR PRONOUNCEMENT ON --------- ----------- -- SR.P.S. 7. FILE SENT TO THE BENCH CLERK --------- --------- ---- SR.P.S. 8. DATE ON WHICH FILE GOES TO THE ------- --------- ---- 9. DATE OF DISPATCH OF ORDER --------- --------- ----