ITAT Deletes INR 1 Lakh Penalty of Proper ITR Filing & Audit Report

The Income Tax Appellate Tribunal (ITAT), Chennai has deleted the penalty of Rs 1 Lakh as there was proper income return filing including a tax audit report.

Under section 133A of the act, a survey was performed on the taxpayer’s M/s. Saravana Foundation business premises, it is revealed that the taxpayer has obtained the gross receipt of nearly Rs 1.5 cr for each fiscal year beginning from the FY 2007-08 while the same would not furnish its income return. Since the examination was performed under section 133A of the act the proof was revealed for the escapement of the incurred income and to assess the escaped income, the assessment of the AY 2008-09 to 2012-13 would already be reopened under section 147 of the act.

Before taxpayer, the notice under section 148 of the act was being issued for the assessment year 2011-12. To answer the notice the taxpayer has furnished its income return considering the income of Rupees 6,81,745. Hence the notice under section 143(2) of the Act was issued to the taxpayer and was served on the taxpayer. Post acknowledging the submission of the taxpayer, the assessing officer would get finish the assessment under section 143(3) r.w.s. 147 of the act and examined the taxpayer’s total income which is Rs 20,38,090 post to disallow the expenditure that the taxpayer has claimed.

Inside the assessment order, the assessing officer sees that under the tax audit report furnished with the income return the same was seen that the books of accounts of the taxpayer were get audited via CA, according to the provisions of section 44AB of the act the taxpayer is obligated to get his accounts audited via the accountant, however, the taxpayer would be got his account audited, since the taxpayer unable to undertake his accounts audited, penalty under section 271B of the Act is obligated to be charged.

A Division Bench consisting of V. Durga Rao, Judicial Member, and G. Manjunatha, Accountant Member revealed that In the assessment order under section 143(3) r.w.s. 147 of the Act, the Assessing Officer considered that the taxpayer has furnished the income return including the tax audit report. Acknowledging the elaborations the taxpayer was contained via a reasonable cause for the late tax audit report filing under section 44AAB of the Act we would acknowledge the opinion that the penalty imposed under section 271B of the act shall be imposed to get removed.