COMMISSIONER OF INCOME TAX Vs. ASHOKA DAIRY

JUDGEMENT

(1.) ON an application made by the Revenue under s. 256(1) of the IT Act, 1961 (for short, "the Act"), the Income -tax Appellate Tribunal, Delhi Bench "B", 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 Tribunal was right in law in confirming the order of the learned CIT(A), Karnal, who deleted the penalty of Rs. 1 lakh imposed under s. 271B of the IT Act, 1961 by the AO -

(2.) THE assessee is engaged in the sale of milk. For the asst. yr. 1985 -86, its turnover was more than Rs. 40 lakhs. accountant, namely, M/s Rajesh Behl & Associates. Later on, the assessee filed revised return under the Amnesty Scheme. The AO accepted the return but initiated penalty proceedings under s. 271B on account of delayed filing of the same. In its reply, the assessee tried to explain delay in the filing of return by stating that its partners were not well educated; that its accountant had left the service and that the chartered accountant had delayed preparation of the audit report. The AO did not accept the explanation of the assessee, albeit without assigning cogent reasons and imposed penalty of Rs. 1 lakh. On appeal, the CIT(A) set aside the penalty order. While doing so, he took into consideration the following factors :

(3.) SHRI Rajesh Bindal, learned counsel for the Revenue fairly conceded that there was delay of only one month and 28 days in filing of the return and that the revised return was filed under the Amnesty Scheme. He also conceded that the AO had accepted the return. He, however, justified the levy of penalty by arguing that the AO had no option but to do so because the assessee had failed to comply with the mandate of s. 44AB of the Act, inasmuch as, it had filed return on