IN INCOME TAX APPELLATE TRIBUNAL H , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI PAWAN SINGH, JM ITA No.5498/Mum/2015 ( Assessment Year :2011-2012) M/s Vora Home Makers Vs. ACIT-9(3), Mumbai Private Limited, A-13, Datani Towers, S.V.Road, Borivali(West), Mumbai- 400092 PAN/GIR No. : AAACV 1329 Q (Appellant) ( Respondent) Assessee by : Shri Anuj Kisnadwala Revenue by : Shri G.Nantha Kumar Date of Hearing : 26/09/2016 Date of Pronouncement 28/09//2016 ORDER PER R.C.SHARMA (A.M): This is appeal filed by assessee against order of CIT(A)- Mumbai, for assessment year 2011-2012, in matter of imposition of penalty under Section 271B of I.T.Act. 2. Rival contentions have been heard and record perused. 3. facts in brief are that during year under consideration, Assessee has filed his return electronically on 28/09/2012. In course of assessment, AO found that assessee has not filed audit report alongwith return, therefore, levied penalty under Section 271B for not having books of account audited in time. assessee Company, in 2 ITA No.5498/15 response to said notice has furnished following reply through its Authorised Representative, M/s AJ.Kanakia & Co. Chatered Accountants: "As per CBDT Circular No 912006 dated 1011012006, wherein it has been stated that in case where return is filed electronically, assessee would not be required to file any document physically, (including tax - audit report). Thus, circular clearly mentioned that in case of return filed electronically, obligation of assessee was limited to gets report of audit before due date of filing return of income and retain said report with itself and such report could be filed during course of assessment proceedings. Since, assessee had gets its accounts audited on 28/0912011, no penalty can be levied u/s 271B of Income Tax Act, 1961." However, AO did not agree with assessee s contention and observed that assessee has filed its return of income on 28/09/2012 which was due for filing on or before 30/09/2011 without enclosing Audit Report. 4. By impugned order CIT(A) confirmed action of AO against which assessee in further appealed before us. 5. Learned AR placed on record copy of CBDT Circular dated 10/10/2006 and also copy of judicial pronouncements of Co-ordinate Bench to effect that alongwith return filed electronically, audit report is not required to be filed with return but at time of assessment. 6. On other hand, learned DR relied on order of authorities below. 7. We have considered rival contentions and found that issue under consideration is squarely covered by decision of Mumbai Bench in case of B.D.Leasing & Finance Ltd., in ITA No.7355/MUM/2010 vide order dated 04/01/2013, where in tribunal deleted penalty imposed u/s.271B after observing as under:- 5. We have heard both parties and their contentions have carefully been considered. facts stated above are not in dispute. return has been filed by assessee by electronic media on 31/3/2008. return filed by assessee is belated return. For late filing return, AO had also initiated penalty proceedings 3 ITA No.5498/15 under section 271F of Act. assessee stated reasonable cause as being under financial constrains. No penalty has been stated to be levied under section 271F of Act. penalty for failure to file audit report alongwith return of income is described in section 271B of Act. According to section 271B if assessee fails to get its account audited in respect of any previous year or furnished report of such audit as required under section 44AB AO may direct that such person shall pay by way of penalty, and sum should not exceed Rs. 1.00 lac or % of total sale / turnover/ gross receipts. Under section 273B penalty cannot be imposed in certain cases, which inter-alia include sections 271B and271F, if assessee is able to prove that there was reasonable cause for said failure. In present case assessee vide letter dated 25/6/2009 has pleaded before AO that it was not under obligation to file audit report and such contention of assessee was supported by aforementioned circular relevant portion of which has already been produced in above part of this order. In aforementioned circular it has been clearly mentioned that in case return is filed electronically obligation of assessee was limited to get report of audit before due date of filing return and retain said report with assessee itself and such report in original could be filed during course of assessment proceedings. assessee in present case has obtained audit report before due date of filing return. As return was filed electronically even though said return was belatedly filed, assessee was not under obligation to submit audit report which can be submitted during course of assessment proceedings. assessee is supported by aforementioned circular. In any case, default of assessee is only technical default and assessee is saved by provisions of section 273B of Act as reliance on aforementioned circular can be considered to be reasonable cause for alleged failure. 8. above decision was followed by ITAT-Indore Bench in case of Navbharat Powerloom Cooperative Society Limited vide its order dated 10/04/2013. 9. Applying proposition of law laid down in above judicial pronouncements, we do not find any merit for imposition of penalty. Though undisputedly audit report was obtained on 28/09/2011 and same was filed during course of scrutiny of assessment proceedings, there was no requirement to furnish copy of audited account and tax audit report before due date. 4 ITA No.5498/15 tax audit report have been made mandatory to be filed electronically only from A.Y.2013-2014. 10. In result, appeal of assessee is allowed. Order pronounced in open court on this 28/09/2016. Sd/- Sd/- (PAWAN SINGH) (R.C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated 28/09/2016 karuna, Sr. PS Copy of Order forwarded to : 1. Appellant 2. Respondent. 3. CIT(A), Mumbai. 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. BY ORDER, //True Copy// (Asstt. Registrar) ITAT, Mumbai M/s Vora Home Makers Private Limited v. ACIT-9(3), Mumbai