THE issue is - Whether, for the purpose of timely submission of the audited books, the onus lies on the assessee to furnish necessary papers and ensure that the CA does his job properly. YES is the answer.
Facts of the case
The Assessee-firm, engaged in manufacturing carpets and rugs, filed its return for the relevant AY showing its total income. In the course of the assessment proceeding, the AO noted that the accounts of the Assessee was signed on 21.12.2005 however, the same was supposed to be completed and signed before 30th September of the year under consideration. Therefore, the AO found that as per the provisions of section 44AB, the Assessee had failed to get its accounts audited in respect of the previous year relevant to the AY. Accordingly, the penalty proceedings u/s 271B was initiated. The Assessee failed to furnish any relevant evidences therefore, the AO imposed a penalty and passed the assessment order. On appeal, the CIT(A) confirmed the penalty u/s 271B.
On appeal, the Tribunal held that,
++ there was a delay on the Assessee's part in submitting books of accounts to the tax auditor. The tax audit should have been completed up to 30.09.2005. Therefore, books of accounts should have been given by the Assessee to the tax auditor before 30.09.2005 but as per the certificate of the CA the books of accounts were given to the CA before 31.10.2005 therefore it is delay on the part of the Assessee and the assessee did not explain this delay before us. The assessee has not explained the reason for not submitting book of accounts to the tax auditor, before 30.09.2005 and why it was submitted before 31.10.2005. Why the books of accounts were not submitted to CA before 30.09.2005, (so that, tax audit would have been completed on time), has also not been explained by Assessee. During the course of hearing, the counsel has been emphasizing that there was a delay on part of the CA to complete the tax audit report but from the certificate which was submitted by the Assessee before us clearly shows that there is no delay on the part of the CA. It is the delay on the part of the Assessee in submitting the books of accounts to the CA;
++ the Assessee has not explained the reasonable cause for delay in getting the tax audited done. The counsel only stated that the tax audit report was signed on 21.12.2005 and the return was filed on 28.12.2005 and explained us that tax auditor delayed the accounts, is not acceptable in view of the tax auditor certificate.The Assessee has explained the delay between 21.12.2005 to 28.12.2005 which is not relevant here, because this is the further delay after getting the delayed tax audit report. The counsel has failed to explain the delay between 30.09.2005 to 21.12.2005 therefore, we are of the view that it is failure on the part of the Assessee;
++ the counsel has failed to prove the reasonable cause. The Assessee cannot simply shirk his responsibility by saying that there was delay on the part of the CA whereas we noticed that there was delay on the part of the Assessee. It is the duty of the Assessee to ensure that the CA is doing his job properly. The Assessee should have enquired periodically or at least within a reasonable time as to whether the tax audit report signed or filed or not with the Revenue authorities. The Assessee has not established any correspondence between himself and the CA. As per the certificate of the CA, it is also clear that he could not complete the tax audit because Assessee did not submit some papers or documents to him. Therefore, considering the factual position we confirm the penalty u/s 271B.
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