COMMISSIONER OF INCOME TAX Vs. S.S. BANGA

JUDGEMENT

(1.) ON a petition filed by the CIT, Haryana, Rohtak, under s. 256(1) of the IT Act, 1961 (for short, "the Act"), the Income - tax Appellate Tribunal, Delhi Bench "E", New Delhi (for short, "the Tribunal"), has referred the following question of law for the opinion of this Court : "Whether, on the facts and in the circumstances of the case, the Hon'ble Tribunal was right in law in reversing the order of the learned CIT(A) who confirmed the penalty of Rs. 20,064 imposed under s. 271B of the IT Act, 1961 by the AO -

(2.) IN terms of s. 44AB of the Act, the assessee was required to file a return for the asst. yr. 1993 -94 along with the than 4 months. While finalising the assessment, the AO issued notice under s. 271B of the Act proposing to impose penalty on account of delayed filing of the audit report. In the reply filed on behalf of the assessee, it was averred that 20,064. The CIT(A), Faridabad, confirmed the penalty orders and dismissed the appeal filed by the assessee. However, in further appeal filed by the assessee, the Tribunal deleted the penalty by making the following observations : "As per the facts recorded in the orders of the Revenue authorities, the assessee was required to file the audit report along with the return of income under sub -s. (1) of s. 139 of the Act. The audit report was, however, filed along with the return filed, under s. 139(4) of the Act. The observations of the learned CIT(A) that the assessee led no evidence to were there the Departmental authorities were free to examine the authenticity of the date on which the report was stated to have been obtained. In the absence of any such evidence available on record, it could not be said that the would be covered by the various decisions of the Tribunal, Delhi Benches as cited by the learned Authorised Representative. Respectfully following the aforesaid decision, we would delete the penalty as confirmed by the learned CIT(A)."

(3.) WE have heard Shri Rajesh Bindal, learned counsel for the Revenue, and perused the record. In ITO vs. Kaysons India (2000) 163 CTR (P&H) 75 : (2000) 246 ITR 489 (P&H), a Division Bench of this Court interpreted the provisions of ss. 44AB, 139 and 271B of the Act and held : and s. 234A was incorporated which provided for a stringent penal interest for the period of such delay. At any rate whatever lacuna was there in the provisions of s. 44AB or s. 271B has since been plugged by the legislature by virtue of amendments made in ss. 44AB and 271B by the Finance Act, 1995. A further obligation has been cast on an assessee who is required to obtain the accounts audited under s. 44AB, also to furnish the audit report to the AO before the specified date. Similarly, s. 271B has also been amended so as to cover the default of failure to furnish the audit report within the specified time. Prior to the amendment in 1995, there was no requirement to submit the audit report before the specified date and naturally there was no provision for levy of penalty for failure to submit such audit report under s. 271B. Even after these amendments, s. 44AB does not require filing of such return along with the audit report within the time specified under sub -s. (1) of s. 139 and consequently no penalty for such a default has been provided in s. 271B. Penal provisions have to be construed strictly and penalty can be levied only for the defaults provided therein. Neither can any additional default be read in a provision on the ground of logic nor can a default provided therein be ignored on the ground of hardship."