The Commissioner Of Income Tax Jalandhar-1,Jalandhar v. M/S Cheema Filling Station, Dasuya

In the High Court for the States of Punjab and Haryana at Chandigarh… ITA No. 454 of 2007 Date of decision: 15.2.2008 The Commissioner of Income Tax Jalandhar-1,Jalandhar ..Appellant Versus M/s Cheema Filling Station, Dasuya.. Respondent Coram: Hon’ble Mr.Justice Satish Kumar Mittal Hon'ble Mr.Justice Rakesh Kumar Garg Present:Mr.Sanjiv Bansal, Advocatefor the appellant-Revenue. Rakesh Kumar Garg,J 1.This order shall dispose of ITA No.454 and 455 of 2007.TheRevenue has filed these appeals under Section 260-A of the Income TaxAct,1961 challenging order dated 5.4..2007 passed by the Income Tax AppellateTribunal, Amritsar Bench, Amritsar in ITA No.94 & 95(ASR)/2002 in case of theassessee for the assessment year 1996-97 by raising the following substantialquestions of law:- i) Whether on the facts and in the circumstances of the case and inlaw, the order of the ITAT deleting the penalty of Rs.1,00,000/-imposed under Section 271B of the Act for assessee's failure to getits books of account audited before the specified date and tofurnish the same by the specified date as per section 44AB of theAct was not perverse ?” 2.The brief facts of the case are that the respondent/assessee is afirm running a Petrol Pump. No return of income was filed by the assessee forthe year ending 31.3.1996 relevant to Assessment Year 1996-97. Notice underSection 148 was issued and served upon the assessee. The assessee filed thereturn of income along with audit report on 21.12.1999 declaring loss of Rs.371/-. The returned income was accepted under Section 143(1) of theIncome Tax Act. Since the total turn over exceeded Rs.40 lacs, it was obligatoryon the part of the assessee to get its books of account audited before thespecified date and to furnish the same by the specified date in view of theprovisions of Section 44AB of the Income Tax Act. A show cause notice wasissued to the assessee on 5.3.2001 for imposing penalty under Section 271 B ofthe Act. 3.In response to this notice, the assessee filed a written reply. In thereply, it was submitted by the assessee that the assessee firm though had notsubmitted its Income Tax Return due to some unavoidable circumstances buthad got its accounts audited from the Chartered Accountant well in advance andalso sent the audited report under postal certificate(UPC) to the department. TheIncome Tax Officer, Dasuya vide his order dated 19.9.2001 imposed a penalty ofRs.1,00,000/- on the assessee under Section 271B of the Income Tax Act. 4.Feeling aggrieved against this order, the assessee filed an appealbefore the Commissioner of Income Tax(Appeals), Jalandhar. The said appealwas dismissed by the Commissioner of Income Tax(Appeals), Jalandhar videorder dated 20.2.2002. The assessee further filed an appeal before the Tribunal.The Tribunal vide its order dated 5.4.2007 passed in ITA No.94& 95(ASR)/2002partly allowed the appeal and held that the levy of penalty under Section 271Bwas uncalled for and thus the penalty was deleted. The relevant part of thejudgment of the Tribunal is reproduced as under:- “We have heard the parties and have perused the materialon record. The issue under consideration is as to whether thepenalty under Section 271B has rightly been levied on theassessee. The case of the assessee is that certified copy of theTAR had been dispatched well in time to the Department. Theassessee has produced on record copies of the UPCs. The versionof the assessee has been disbelieved, since the person sendingthe UPCs could be produced by the assessee, nor his name and address was furnished. The inability of the assessee in this regardwas due to the fact that the said person was a part timeaccountant, who had later on left the job with the assessee. Theauthenticity of the UPCs had not been doubted. It is also not thecase of the Department that the UPCs were of a date beyond thespecified date. address was furnished. The inability of the assessee in this regardwas due to the fact that the said person was a part timeaccountant, who had later on left the job with the assessee. Theauthenticity of the UPCs had not been doubted. It is also not thecase of the Department that the UPCs were of a date beyond thespecified date. In Kalyani Selection (supra), it has been held that where avalid return was dispatched within the prescribed time undercertificate of posting and was correctly addressed, a presumptionof the return having been filed within time would arise, and that insuch a case, levy of penalty was invalid. In the present case too,the Department has not been able to repel the UPCs produced onrecord by the assessee, showing that the TAR had been dulydispatched within time to the department. Therefore, levy ofpenalty is uncalled for.” 5.We have heard Shri Sanjiv Bansal, Advocate, learned counsel forthe Revenue. 6.Learned counsel for the Revenue has vehemently argued that asper the provisions of Section 44AB, it was obligatory for the assessee to obtainits audit report before the due date and submit the same before the specifieddate. However, the assessee had not been able to adduce evidence and hencethe default committed by the assessee stood obviously established. We find noforce in the contention of the learned counsel for the Revenue. A finding of facthas been recorded by the Tribunal that the assessee has sent a certified copy ofthe Tax Audit Report to the Department well in time under postal certificate(UPC)and the authenticity of the UPC has not been doubted by the department. It is acase of the department that the UPC was of a date beyond the specified date.Even before us, the learned counsel for the Revenue was unable to challengethe said finding of fact recorded by the Tribunal. Thus the department has notbeen able to repel the said contention of the assessee and therefore, levy of penalty is uncalled for. Thus no substantial question arises in the present appeal and the same is dismissed. (RAKESH KUMAR GARG) JUDGE February15,2008 nk (SATISH KUMAR MITTAL) JUDGE In the High Court for the States of Punjab and Haryana at Chandigarh … ITA No. 455 of 2007 Date of decision: 15.2.2008 The Commissioner of Income Tax Jalandhar-1,Jalandhar ..AppellantVersusM/s Cheema Filling Station, Dasuya.. Respondent Coram: Hon’ble Mr.Justice Satish Kumar MittalHon'ble Mr.Justice Rakesh Kumar Garg Present:Mr.Sanjiv Bansal, Advocatefor the appellant-Revenue. Rakesh Kumar Garg,J For orders- see ITA No. 454 of 2007-The Commissioner of Income Tax Jalandhar-1,Jalandhar versus M/s Cheema Filling Station,Dasuya. RAKESH KUMAR GARG) JUDGE February15,2008 (SATISH KUMAR MITTAL) nk JUDGE