Ignorance of law
The contention that ignorance of law cannot be an excuse was found to be unacceptable in view of the decision of the Hon’ble Supreme Court in the case of Motilal Padampat Sugar Mills Co. v. State of U.P. [1979] 118 ITR 326
wherein it was held that there is no presumption in this country that every person knows the law and it would be contrary to common sense and reason if it were so. It was also stated that “it is impossible to know all the statutory law, and not very possible to know all the common law”
The Hon’ble Madras High Court in the case of CIT v. K P V Shaik Mohammed Rowther & Co. (P.) Ltd. [1998] 232 ITR 176 (Mad) held as under:
“Ignorance of law can be a reasonable cause for the failure and deletion of penalty was justified. Further, it is observed that the Revenue could not bring any material before us to show that any loss to the Revenue was caused because of the aforesaid delay in furnishing of the quarterly statements by the assessee. On the above facts, we do not find any error in the findings of the Learned Commissioner of Income -tax (Appeals) that the breach of provisions by the assessee by filing the quarterly statements with certain delay was technical or venial breach of law only. Keeping in view the decision of the Hon’ble Supreme Court in the case of Hindustan Steel Ltd. v. State of Orissa 83 ITR 26 (SC) and the decision of the Jurisdictional High Court in the case of Harsiddh Construction Pvt. Ltd. v. CIT 244 ITR 417 (Guj.), we do not find any good reason to interfere with the order of the Learned Commissioner of Income -tax (Appeals). Therefore, the appeal of the Revenue is dismissed.”
Ignorance of law is not an excuse for Chartered Accountant
IN THE ITAT AMRITSAR BENCH, Ajit Singh Rana v. Assistant Commissioner of Income-tax , Range-II, Jalandhar ( IT APPEAL NOS. 454 TO 456 (ASR.) OF 2011 [ASSESSMENT YEARS 2003-04 TO 2005-06]DECEMBER 11, 2012 There is no reasonable cause except that the provisions were new to the assessee or to the Chartered Accountant of the assessee and therefore, the audit report could not be filed in time. We are of the view that ignorance of law is of no excuse, especially the CA who has audited the accounts of the assessee and the assessee has stated of having obtained the audit report but did not file the audit report alongwith return of income could not by any stretch of imagination be a reasonable cause for failure to file the audit report under section 92E of the Act. As per section 92E of the Act, every person who has entered into international transaction during a previous year shall obtain report from an Accountant and furnish such report on or before the specified date in the prescribed form duly signed and verified in the prescribed manner by such accountant and setting forth such particulars as may be prescribed. Therefore, these provisions contained in section 92E and provisions of section 271BA cannot be equated with section 271B of the Act.