2001 (7) TMI 1275 - HC - Income Tax

Summary

Issues Involved:
The issue involves the levy of penalty under section 271B of the Income-tax Act, 1961 for non-compliance with section 44AB, and the subsequent appeal process leading to the Tribunal's decision to reverse the penalty.

Summary of Judgment:

Issue 1 - Penalty under section 271B for non-compliance with section 44AB:
The respondent-assessee filed its income tax return which was processed under section 143(1)(a) of the Income-tax Act, 1961. Proceedings under section 271B were initiated due to alleged non-compliance with section 44AB. The assessing authority levied a penalty of Rs. one lakh, which was upheld by the Commissioner but later reversed by the Tribunal. The Tribunal considered the circumstances, including the timing of the tax audit report and the completion of the final audit report, and concluded that the assessee, a Government Corporation, was not at fault. Consequently, the Tribunal quashed the penalty, a decision upheld by the High Court. The Court found no reason to interfere with the Tribunal's decision, and the appeal was dismissed.

Conclusion:
The High Court upheld the Tribunal's decision to quash the penalty imposed under section 271B for non-compliance with section 44AB, considering the circumstances surrounding the audit reports and finding no fault on the part of the Government Corporation assessee.