COMMISSIONER OF INCOME TAX Vs. HARYANA AGRO SERVICES

JUDGEMENT

(1.) AT the instance of the CIT, Haryana, Rohtak, the Income -tax Appellate Tribunal (Delhi Bench "C", 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 interpreting the provisions of s. 271B and thereby confirming the order of the learned CIT(A), who deleted the penalty of Rs. 54,269 imposed under s. 271B by the AO -

(2.) 271B of the IT Act, 1961 (for short, "the Act"), proposing to impose penalty on the ground of violation of s. 44AB. After Commissioner of Income -tax (Appeals), Faridabad [for short, "the CIT(A)"], set aside the penalty order by observing that the assessee had substantially complied with the requirement of filing of the audit report. The Tribunal confirmed the appellate order and dismissed the appeal filed by the Revenue.

(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."