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Issues involved: The judgment addresses the issue of penalty under section 271B of the Income-tax Act, 1961 for failure to file the return along with the audit report before the specified date.
Summary: The High Court of Punjab and Haryana heard six appeals involving common questions of law and facts regarding the imposition of penalty under section 271B of the Income-tax Act, 1961. The Revenue contested the Tribunal's decision that no penalty was leviable under section 271B. The case revolved around the assessee's failure to file the return along with the audit report by the specified date, leading to the penalty imposition by the Assessing Officer. The Commissioner of Income-tax (Appeals) and the Tribunal canceled the penalty, stating that penalty under section 271B applies only if the accounts are not audited or the audited accounts are not filed along with the return of income. The Revenue appealed this decision under section 260A of the Act. The court analyzed sections 44AB and 271B of the Act before April 1, 1995, to determine the penalty provisions. It was observed that section 271B penalizes specific failures, including failure to get accounts audited, obtain the audit report, or furnish the audit report along with the return of income. The default of not filing the return along with the audit report by the specified date was found not covered by section 271B in this case. The court emphasized that penalty provisions must be strictly construed, and penalties can only be imposed for the defaults explicitly provided for. The court dismissed the appeals, stating that the penalty under section 271B was not applicable in this scenario. It highlighted that subsequent amendments in 1995 addressed the gaps in the law, requiring the submission of the audit report before the specified date. The judgment emphasized that penalties should be imposed only for specified defaults and not for additional defaults based on logic.
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