Law:

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Section 271B of Income-tax Act, 1961 - Penalty - For failure to get accounts audited - Assessment years 1989-90 and 1990-91 - For relevant years, assessee filed returns of income under section 139(4) along with audit report under section 44AB before specified date - However, Assessing Officer levied penalty under section 271B for alleged violation of assessee to file audit reports by due date for filing return under section 139(1) - Whether since audit report under section 44AB was filed along with a return other than a return under section 139(1), and before issue of notice under section 142(1)(i), no penalty was exigible on assessee - Held, yes FACTS In respect of the assessment years 1989-90 and 1990-91, the Assessing Officer levied penalty under section 271B on the assessee for alleged violation on its part to file audit reports along with the return of income by the due dates for filing returns under section 139(1). As per the Assessing Officer, the due dates for filing return under section 139(1) were on or before 31-10-1989 and 31-10-1990, respectively, however, the returns of income were actually filed by the assessee on 26-3-1991 and 1-11-1991, respectively, which were accompanied by the audit reports, under section 44AB. The assessee contended that the return of income having been filed under section 139(4), there was no default on its part in furnishing the audit reports along with the returns of income filed under sub-section (4) of section 139. But, the Assessing Officer rejected said contention. On appeal, the Commissioner (Appeals) upheld the levy of penalty. On further appeal, the Tribunal deleted the penalties on ground that the return of income had been filed under section 139(4) and prior to the issue of notice under section 142(1). On reference: HELD In ITO v. Kaysons India [2000] 246 ITR 489 (Punj. & Har.) and CIT v. Ashoka Dairy [2005] 279 ITR 32 (Punj. & Har.) (Income-tax Reference No. 61 of 1995), it has been held that where the return of income has been filed under sub-section (4) of section 139 and the same is duly accompanied by the audit report obtained by the assessee in accordance with the provisions of section 44AB,…

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