PAWAN COTTON MILLS Vs. ITO

JUDGEMENT

(1.) This appeal has been filed by the assessee against the order of the CIT (A) dated 21-6-1994 pertaining to assessment year 1988-89.

(2.) The only effective issue before us is whether the penalty levied under section 271B of the Income Tax Act, 1961 (hereinafter referred to as the Act), for not obtaining the audit report as required under section 44AB in the given facts and circumstances of the case is sustainable in the eyes of law.

(3.) The brief and relevant facts are that the Income Tax Officer levied the penalty for non-filing of the audit report along with return. The penalty was levied by the Income Tax Officer for not obtaining the audit report as required under section 44AB of the Act by the assessee within the stipulated time. The case of the assessee is that the audit report dated 30-6-1988 was obtained and as such it had complied with the statutory obligation envisaged under section 44AB of the Act. According to the learned AR, levy of penalty under section 271B is not tenable in the eyes of twain this case because it was based on surmises and conjectures, since the assessee had obtained the audit report in time but failed to file the same along with return. According to the learned authorised representative, the only technical breach has been committed by the assessee which is exonerable under the given facts and circumstances of the case. On the other hand, the learned Departmental Representative heavily relied on the orders of the authorities below and further submitted that the assessee did not obtain the requisite report within the stipulated time and the report placed before the department was antedated.