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Issues:
- Appeal against the cancellation of penalty under section 271B - Interpretation of section 44AB regarding the obligation to obtain tax audit report - Consideration of time limit for obtaining tax audit report in cases of accounts audited under other laws - Justification for non-imposition of penalty due to technical and venial nature of default Analysis: 1. The appeal was filed by the Revenue against the cancellation of penalty under section 271B by the CIT(Appeals). The Revenue argued that the assessee was obligated to obtain the tax audit report before the specified date, as per section 44AB, even if the accounts were audited under the Companies Act. The Revenue heavily relied on case law to support its position. On the other hand, the assessee contended that it complied with the law by getting its accounts audited under the Companies Act and obtaining the audit report before the specified date, believing that no time limit existed for obtaining the tax audit report as per the second proviso of section 44AB. 2. The Tribunal analyzed the language of the second proviso of section 44AB, which specified the conditions for compliance in cases where accounts were audited under other laws. The Tribunal concluded that there was no time limit prescribed for obtaining the tax audit report in Forms 3CA and 3CD. The Tribunal emphasized that the legislature consciously omitted any time limit for obtaining the further report in the prescribed form, indicating that compliance was not time-bound in this regard. 3. Considering the facts of the case, the Tribunal found that the assessee had met all requirements of section 44AB by getting the accounts audited under the Companies Act and obtaining the audit report in Forms 3CA and 3CD. Despite obtaining the report after the specified date, the Tribunal held that the assessee was not liable for penalty under section 271B. The Tribunal also noted that the default was of a technical and venial nature, further justifying the non-imposition of the penalty. 4. The Tribunal dismissed the appeal of the Revenue, upholding the order of the CIT(Appeals. The Tribunal clarified that the observations and decisions cited by the Revenue were not applicable to the present case, as they were made in a different context. The Tribunal concluded that the assessee had complied with the legal requirements, and the penalty imposition was not justified based on the technical nature of the default and the interpretation of the law. End of Analysis
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