COMMISSIONER OF INCOME TAX Vs. PAWAN RICE MILLS

JUDGEMENT

(1.) ON an application filed by the CIT, Rohtak, under s. 256(1) of the IT Act, 1961 (for short, 'the Act'), 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 learned CIT(A), who deleted the penalty of Rs. 59,410 imposed under s. 271B by the AO -

(2.) FOR the asst. yr. 1990 -91, the assessee filed return without the audit report as required by s. 44AB. Therefore, while imposed penalty of Rs. 59,410. On appeal, CIT(A), Faridabad, reversed the penalty order. Further appeal filed by the "5. On considering the rival submissions, we agree with the contention raised by the learned counsel for the assessee. A bare reading of s. 44AB and s. 271B it is evident that assessee has to get his accounts audited and obtain a report of such audit on or before the specified date as required under s. 44AB and further to furnish the said report along with the return of income filed under sub -s. (1) of s. 139 or along with the return of income furnished in response to a notice be penalised under the relevant provisions for late filing of the return. Another requirement of s. 271B is that the audit reports must accompany a return filed under s. 139(1) or a return filed under s. 142(1)(i) of the IT Act. In assessee's case, the return of income cannot be treated as a return filed under s. 139(1). In this view of the matter, we do not find any ground to interfere with the order of CIT(A) and accordingly the order of the CIT(A) is upheld."

(3.) WE have heard Shri Rajesh Bindal. 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 s. 271B, and s. 44AB of the Act and held as under : "It is, therefore, evident that the default or failure to file the return along with the audit report on or before the specified date is not hit by the provisions of s. 271B. It is not the case of the Revenue that the assessee has failed to get the accounts audited or has failed to obtain the report of such audit in terms of s. 44AB before the specified date. It is also evident that no return had been filed either under sub -s. (1) of s. 139 or in response to any notice under cl. (i) of sub -s. (1) of s. 142 and as such there could possibly be no default of not furnishing the audit report along with such a non - duly accompanied by the audit report obtained by the assessee in accordance with the provisions of s. 44AB. Thus, according to us, the default for which penalty had been levied was not covered by the provisions of s. 271B and the CIT (A) and the Tribunal were justified in holding that no penalty was leviable."