METRO AGENCIES Vs. DY. CIT

JUDGEMENT

(1.) HEARD learned counsel for the appellant. We have also gone through the judgment cited by learned counsel for the appellant in CIT v. Data Software Research Co. (P.) Ltd. : (2007) 212 CTR (Mad) 323 : CDJ 2006 MHC 1925.

(2.) THE brief facts of the case that led to filing of present appeal are as under :

(3.) IT is not in dispute that the appellant was consistent in a stand so far as the sufficient cause for the delay in filing the audit report, i.e., the absence of the accountant of the firm. According to them, only by the end of December, 2005, they could finalise the accounts and return came to be filed in the month of January, 2006 by which time there was delay of three months in submitting audit reports. According to the appellant, the penalty under section 271B of the Act can be imposed only in case of absolute default in obtaining the audit report and furnishing the same. According to them, absolute default in obtaining the audit report would mean, not at all filing the audit report and not an audit report which was filed beyond the time prescribed under the Act. According to the appellant, the explanation offered by the assessee amounts to reasonable cause. In the judgment relied upon by learned counsel for the appellant from paras 9.1 to 9.4 various judgments of the High Court of Madras and Supreme Court are referred to. From reading paras 9.1 to 9.4, the settled law would be that a reasonable cause can be said to be a cause which prevents a man of average intelligence and ordinary prudence, acting under normal circumstances, without negligence or inaction or want of bona fides on his part. It is also well -settled from the above decision that so far as reasonable cause, it depends upon the facts and circumstances of each case.