Law:

Section:

Section 271B of the Income-tax Act, 1961 - Penalty - For failure to get accounts audited - Assessment year 1993-94 - Assessing Officer levied penatly under section 271B as assessee did not file audit report along with return in time - In reply to notice, assessee submitted that though said report was obtained well in time, yet due to some reasons it could not be filed in time - Tribunal held that in absence of evidence that audit report could not be obtained in time, penalty could not be levied - Whether on facts, Tribunal was right in deleting penalty - Held, yes FACTS In terms of section 44AB, assessee was required to file a return for the assessment year 1993-94 along with the audit report on or before 31-10-1993. However, he filed the return on 8-3-1994, i.e., after a delay of more than 4 months. While finalising the assessment, the Assessing Officer issued notice under section 271B proposing to impose penalty on account of delayed filing of the audit report. In the reply the assessee averred that the required report had been obtained well in time, i.e., on 27-10-1993 but due to some reasons, the same could not be filed up to 31-10-1993 along with the return. The Assessing Officer, however, imposed penalty. On appeal, the Commissioner (Appeals) confirmed the impugned penalty. On second appeal, Tribunal observed that the observations of the Commissioner (Appeals) that the assessee led no evidence to show that the audit report was obtained by 27-10-1993, were not based on any solid reasons and that in case certain doubts were there the departmental authorities were free to examine the authenticity of the date on which the report was stated to have been obtained and held that in absence of any such evidence available on record, penalty could not be sustained. On reference : HELD In view of the law laid down in various cases, the Tribunal did not commit any illegality by setting aside the order of penalty. [Para 8] CASES REFERRED TO ITO v. Kaysons India [2000] 246 ITR 489/[2001] 116 Taxman 525 (Punj. & Har.) [Para 3], Mohan Trading Co. v. Union of India[1985] 156 ITR 134/[1986] 29 Taxman 54 (MP) [Para 4], CIT v. Ramkrishna Stores [2002] 253 ITR 175/[2003]…

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