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2007] 292 ITR 411 [2007] 164 TAXMAN 137 (KAR.) HIGH COURT OF KARNATAKA Saraswathi Electronics v. Income-tax Officer, Ward-I, Hassan R. GURURAJAN AND N. ANANDA, JJ. IT APPEAL NO. 336 OF 2001 OCTOBER 16, 2006 Section 271B of the Income-tax Act, 1961 - Penalty - For failure to get accounts audited - Assessment years 1991-92 to 1994-95 - Assessee got its accounts audited for relevant assessment years in year 1995 - It filed returns for relevant assessment years along with audit report on 25-7-1995 - Reasons given by assessee for delay in getting accounts audited were that as it was not conversant with Act, it was not writing books of account and it was not aware that accounts were to be got audited and that audit report along with return of income should be filed within time allowed under Act - Assessing Officer, however, imposed penalty under section 271B - Whether since ignorance of Act cannot be a ground for non-writing of books of account, Assessing Officer was justified in levying penalty for assessment years 1991-92 to 1993-94 - Held, yes FACTS The assessee got its accounts audited for the assessment years 1991-92 to 1994-95 in year 1995. It filed returns for the assessment years 1991-92 to 1994-95 simultaneously along with the audit report on 25-7-1995. The reasons given for delay in filing the audit report were that the assessee could not get the accounts written up daily due to the non-availability of the accounts clerk; that it was not conversant with the Income-tax Act; that it was not aware that the accounts were to be got audited and the audit report along with the return of income should be filed within the time allowed under the Act. The Assessing Officer did not accept the said reasons and imposed penalty on the assessee under section 271B. The Commissioner (Appeals) as well as the Tribunal upheld the order of the Assessing Officer. On appeal : HELD There was no illegality in the order passed by the Assessing Officer. The ignorance of the Income-tax Act could not be a ground for non-writing of the books of account, as contended by the assessee. In those circumstances, the Assessing Officer had taken a right view in levying penalty. The Tribunal,…

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