Madan S Kolambekar, Navi Mumbai vs Assessee

ी डी. म मोहन, उपा य एवं ी संजय अरोड़ा, लेखा के सम ।

BEFORE SHRI D. MANMOHAN, VP AND SHRI SANJAY ARORA, AM

आयकर अपील सं./I.T.A. No. 3139/Mum/2013 ( नधा रण वष / Assessment Year: 2008-09)

Madan S. Kolambekar Dy. CIT, Central Circle-39, RH-4, Balaji Krupa Complex, बनाम/ 112, Aayakar Bhavan, M. K. Road, Plot No.3-A, Sector 28, Mumbai-400 020 Nerul, Navi Mumbai-400 707 Vs.

थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. AHGPK 9177 R (अपीलाथ" /Appellant) : (#$यथ" / Respondent)

अपीलाथ" क% ओर से / Appellant by : Shri M. S. Mathuria

#$यथ" क% ओर से/Respondent by : Shri Love Kumar

सनु वाई क% तार+ख / : 04.02.2015 Date of Hearing घोषणा क% तार+ख / : 10.02.2015 Date of Pronouncement

आदे श / O R D E R Per Sanjay Arora, A. M.:

This is an Appeal by the Assessee directed against the Order by the Commissioner of Income Tax (Appeals)-41, Mumbai ('CIT(A)' for short) dated 26.02.2013, confirming the levy of penalty u/s.271B of the Income Tax Act, 1961 ('the Act' hereinafter) for the assessment year (A.Y.) 2008-09 by the Assessing Officer (A.O.) vide his order dated 29.06.2011.

2. The brief facts of the case are that the assessee did not file his return of income for the relevant year, due on 30.09.2008, by the said date or even belatedly by 31/3/2009. He, 2 ITA No. 3139/Mum/2013 (A.Y. 2008-09) Madan S. Kolambekar vs. Dy. CIT / being the main person of the Madan Kolambekar Group, was subject to search and seizure action u/s.132 of the Act on 22.01.2009, and assessment proceedings initiated by the issue of notice u/s.153A on 20.08.2009. The assessee filed his return, declaring income at Rs.32.74 lacs, on 20.07.2010, which stood subsequently revised to Rs.111.91 lacs on 08.10.2010, i.e., during the course of the assessment proceedings u/s. 143(3) r/w s. 153A. The assessment was finally completed on 29.12.2010, at a total income of Rs.69.25 crores, even as penalty u/s.271(1)(b) stood also levied at Rs.20,000/- for non- compliance of statutory notices issued during the course of the assessment proceedings. Penalty proceedings u/s.271(1)(c) were also initiated on 29.12.2010. Further, the assessee's turnover for the year being at Rs.18.20 crs., his return of income was required by law to be accompanied by a tax audit report u/s. 44AB, which, rather ought to have been filed by the due date of filing the return, i.e., 30.09.2008. Notice u/s.274 of the Act, requiring him to show cause as to why penalty u/s.271B, i.e., for the default of the provision of section 44AB, which requires obtaining and furnishing a tax audit report as prescribed where any person's sales, turnover or gross receipts for the year exceeds Rs.40 lacs, be not imposed, was also issued along with, i.e., on 29.12.2010. Further opportunity was provided to the assessee vide notice dated 10.06.2011. The assessee not filing any reply to either of the said notices, penalty stood levied at Rs.1 lac, being the lower of Rs.1 lac and one-half per cent of the qualifying amount of total sales, turnover or gross receipt. Before the ld. CIT(A), the assessee could not make out any case, merely stating that the default u/s.44AB was involuntary, which was found as without merit, and penalty confirmed. Aggrieved, the assessee is in second appeal.

3. We have heard the parties, and perused the material on record. The assessee's sole contention before us, invoking the decision by the apex court in Hindustan Steel Ltd. vs. State of Orissa [1972] 83 ITR 26 (SC), was of he being not guided properly, so that the default in non-furnishing or, rather, non-obtaining the tax audit report was not voluntary. The Revenue's charge that the assessee did not obtain the tax audit report even subsequently, would not amount to much as obtaining the said report subsequently, i.e., 3 ITA No. 3139/Mum/2013 (A.Y. 2008-09) Madan S. Kolambekar vs. Dy. CIT / after the due date of furnishing the return of income u/s.139(1) (30.09.2008), would be of little consequence in view of the amendment to section 44AB w.e.f. 01.07.1995, requiring the furnishing of the said report by the due date for filing the return u/s. 139(1). We find the assessee's plea as both presumptuous and without substance. The default of section 44AB is admitted. The only saving from penalty u/s.271B, i.e., the provision providing for penalty for the default of the former section, would therefore be s.273B, i.e., upon proving reasonable cause, toward which, however, the assessee has not made out any case, i.e., apart from making a bald claim of being not properly informed of the law.

Section 44AB is on the statute book since the year 1984. Its' existence is rather a matter of common knowledge for the assessees, even as the assessee is a successful businessman, with the range of economic interests. Why, the different entities in which he has interest, or are being controlled by him, would be regularly subject to both, the statutory audit under the governing statute, as well as tax audit u/s.44AB of the Act. In fact, he being an assessee under the Act would himself be properly instructed by counsels in the matter. The assessee's claim, which he is in any case obliged to substantiate, is, to say the least, fanciful. It is for these reasons that we have observed of his case as presumptuous and without substance. The invocation of the decision in the case of Hindustan Steel Ltd. (supra) is, again, misconceived. On the contrary, we find the assessee's conduct, as well as the reason advanced for non-obtaining the tax audit report, as betraying a lack of bona fides. True, the law stands amended, so that he is required not only to obtain, but also furnish the tax audit report by the due date specified u/s. 139(1).

However, obtaining the same subsequently, i.e., at the time the assessee claims to have become aware of having violated the provision, would have only strengthened his claim with regard to a bona fide conduct and of a genuine mistake, i.e., toward establishing a reasonable cause, which alone could save penalty. We, therefore, find no merit in the assessee's case and, accordingly, dismiss his appeal. We decide accordingly.

4 ITA No. 3139/Mum/2013 (A.Y. 2008-09) Madan S. Kolambekar vs. Dy. CIT /

4. In the result, the assessee's appeal is dismissed प1रणामतः 3नधा51रती क% अपील खा1रज क% जाती है ।

Order pronounced in the open court on February 10, 2015

Sd/- Sd/-

(D. Manmohan) (Sanjay Arora) उपा य / Vice President लेखा सद य / Accountant Member

मंब ु ई Mumbai; 8दनांक Dated : 10.02.2015

व.3न.स./Roshani, Sr. PS

आदे श क" # त%ल&प अ'े&षत/Copy of the Order forwarded to :

1. अपीलाथ" / The Appellant

2. #$यथ" / The Respondent

3. आयकर आयु9त(अपील) / The CIT(A)

4. आयकर आयु9त / CIT - concerned

5. <वभागीय #3त3न?ध, आयकर अपील+य अ?धकरण, मुंबई / DR, ITAT, Mumbai

6. गाड5 फाईल / Guard File आदे शानस ु ार/ BY ORDER,

उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील य अ धकरण, मुंबई / ITAT, Mumbai