AI Structured Summary
Not yet generated for this judgment
Judgment
Following question has been referred for opinion of this Court by the income tax Appellate Tribunal, Amritsar Bench, Amritsar, arising out of its order dated 17-11-1992, in respect of assessment year 1990-91:-
Whether on the facts and in the circumstances of the case, the Tribunal was right in cancelling the penalty levied u/s 271B of the income tax Act, 1961?"
The assessee is a registered firm deriving income from manufacturing and sale of Cycle Tyre Tubes and Auto Tyres. The assessee declared gross turnover of Rs. 53,46,130. The turnover being in excess of Rs. 40 lakhs, accounts were required to be audited u/s 44AB of the income tax Act, 1961 (for short, ''the Act'') and audit report was required to be submitted before the specified date mentioned in Explanation 2 to the said provision. The assessee got the accounts audited before the specified date but did not file the return within the time specified u/s 139(1) of the Act. The return was filed on 31-12-1990 along with audit report. The penalty proceedings were initiated u/s 271B on 31-1-1991 and penalty of Rs. 26,730 was imposed by the Assessing Officer on 16-7-1991.
The CIT(A) allowed the assessee''s appeal and deleted the penalty. It was observed that though the assessee may have committed default of late filing of return, there was no non-compliance of section 271B of the Act. The Tribunal affirmed this view.
We find that the issue stands covered by judgment of this Court in ITO v. Kaysons India [2000] 246 ITR 489 1. After considering the relevant provisions, this Court observed at page 492:-
"It is, therefore, evident that the default or failure to file the return along with the audit report on or before the specified date is not hit by the provisions of section 271B. It is not the case of the revenue that the assessee has failed to get the accounts audited or has failed to obtain the report of such audit in terms of section 44AB before the specified date. It is also evident that no return had been filed either under sub-section (1) of section 139 or in response to any notice under clause (i) of sub-section (1) of section 142 and as such there could possibly be no default of not furnishing the audit report along with such a non existent return. The return under sub-section (1) of section 139 in this case could be filed up to 30-11-1990. However, the assessee had filed the return on 31-12-1990, which was a return filed under sub-section (4) of section 139 and this return was duly accompanied by the audit report obtained by the assessee in accordance with the provisions of section 44AB. Thus, according to us, the default for which penalty had been levied was not covered by the provisions of section 271B and the Commissioner of income tax (Appeals) and the Tribunal were justified in holding that no penalty was leviable." (p. 492)
This Court also noticed the amendment in section 44AB and section 271B of the Act, vide Finance Act, 1995 laying down requirement of submitting audit report before the specified date.
The same view has been expressed in the following cases:-
(i) CIT v. Janta Service Station [2001] 251 ITR 347 1 (Punj. & Har.)
(ii) Commissioner of Income Tax Vs. Haryana Agro Services,
(iii) CIT v. Jagat Rice Mills [2006] 150 Taxman 5 (All.)
(iv) CIT v. Pawan Rice Mills [2005] 198 CTR (Punj. & Har.) 694 2
(v) CIT v. K.K. Spunpipe [2006] 200 CTR (Punj. & Har.) 107, CIT v. Ashoka Dairy [2006] 200 CITR (Punj. & Har.) 211 3
(vi) Commissioner of Income Tax Vs. S.S. Banga,
In view of the above, the question is answered in favour of the assessee and against the revenue.