Penalty u/s 271BA deleted for technical glitches in uploading audit report in Form No. 3CEB

Penalty u/s 271BA deleted for not uploading audit report in Form No. 3CEB due to technical glitches when report was obtained before prescribed date

ABCAUS Case Law Citation:
ABCAUS 2936 (2019) (05) ITAT

Important Case Laws Cited/relied upon by the parties
Ajit Singh Rana Vs. ACIT (2013) 33 taxmann.com 502

The instant appeal was preferred by the assessee against the order of Commissioner of Income Tax (Appeals) in confirming the penalty levied u/s 271BA of the Income-tax Act, 1961 (the Act) by the Assessing Officer (AO).

The assessee had filed return of income electronically. The AO noted that there was specified domestic transaction under section 92BA of the Act. The AO further noted that as per section 92E of the Act every person who has entered into an international transaction or specified domestic transaction is required to obtain a report from a Chartered Accountant and furnish such report on or before the specified date in the Form No. 3CEB under rule 10E.

However, the assessee had not filed the report u/s 92E in the form 3CEB electronically while filing the return of income and since the assessee had not filed the report electronically before the prescribed date, the AO imposed penalty u/s 271BA of the Act of Rs. 1 lacs on the assessee.

Aggrieved, the assessee preferred an appeal before the CIT(A), who was pleased to confirm the same. Aggrieved, the assessee was before the Tribunal.

The assessee submitted that he. before the prescribed period, had obtained the audit report from the Chartered Accountant for the specified domestic transaction in prescribed Form 3CEB and because of technical glitches though the return of income was uploaded Form No. 3CEB could not be uploaded which fact the assessee came to know later only when the scrutiny assessment was carried out and thereafter, immediately the assessee had filed report in Form 3 CEB in manual form before the AO which fact has not been denied by the AO.

It was contended that when due to the technical glitches, the Form No. 3CEB could not be uploaded it could not be a ground to impose penalty u/s. 271BA of the Act and since the assessee had already obtained the Form No. 3CEB before the prescribed date.

It was also submitted that the technical glitches in income tax e-filing portal constituted a reasonable cause for not uploading the report in Form 3CEB on time and, therefore, no penalty u/s. 271BA of the Act could be levied on the assessee and that the penalty may be deleted.

The Tribunal noted that the facts of the case were undisputed. The auditor had audited the books of the assessee and since as per the Act and the assessee got the audit report in the prescribed Form no. 3CEB well within the prescribed time stipulated by the Act and the return of income was uploaded later only.

The Tribunal further noted that though the return of income could be uploaded Form No. 3CEB due to the glitches in the Inter-net it could not be uploaded for no fault of the assessee and the form 3CEB report prepared manually had been placed before the AO who later completed the assessment after perusal of the same.

The Tribunal opined that in such a scenario, due to the electronic glitches of the Inter-net at the time of uploading was to be considered reasonable cause, which omission could not be attributed on the assessee and therefore could not be a ground for levy of penalty u/s 271BA of the Act.

Therefore, in the light of section 273B of the Act which provides that no penalty, inter alia, u/s. 271BA of the Act will be leviable if there is reasonable cause for the failure of the assessee to comply with the provisions mentioned therein, the Tribunal directed deletion of the penalty levied

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