Commissioner of Income Tax, Meerut vs Janardhan Sahai Vishwanath

The income tax Appellate Tribunal, Delhi Bench ''B'', New Delhi has referred the following question of law u/s 256(1) of the income tax Act, 1961 for opinion of this Court:- Whether, on the facts and in the circumstances of the case the Hopple ITAT was legally correct in holding that the delay in filing the audit report, but obtained within time could not be the case for Imposing the penalty u/s 271-B of I.T. Act?

The reference relates to the assessment year 1989-90.

Briefly stated the facts giving rise to the present reference are as follows:-

The assessee is carrying on the business of dealer of high speed diesel, Mobile-oil, petrol etc. The assessee had obtained Tax Audit Report as required u/s 44AB. The said Audit Report was, however, filed along with the belated return of Income filed on 26-3-1990. The Assessing Officer imposed penalty u/s 271-B amounting to Rs. 50,924.

The CIT(Appeals) cancelled the said penalty.

The Revenue preferred further appeal before the Tribunal observed that penalty u/s 271B could be levied for failure to obtain the Audit Report before the prescribed date and for failure to submit the said Audit Report along with return of Income furnished u/s 139(1). In the present case, the Audit Report was obtained well within the prescribed time. The belated return filed by the assessee cannot be regarded as a return u/s 139(1). The Tribunal, therefore, relying upon earlier decision of ITAT reported in (1992) 42 ITD 480 confirmed the cancellation of the penalty by the CIT(A).

We have heard the learned Standing Counsel for the Revenue. The question referred to this Court is squarely covered by the decision of this Court in the case of Commissioner of Income Tax Vs. Jai Durga Construction Co., wherein this Court has held that prior to 1995 i.e., before the Amendment made in section 44AB by the Finance Act, 1995 no penalty was leviable on the ground that Audit report though obtained before due date was not filed alongwith the return. We are therefore consider opinion that the order of the Tribunal is in conformity with the decision of this Court. In view of the aforesaid discussion we answer the question referred to us in the affirmative, i.e., in favour of the assessee and against the Revenue.