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Issues:
Appeal against cancellation of penalty under s. 271B of the IT Act for failure to get accounts audited within specified time under s. 44AB for asst. yr. 1990-91. Analysis: The Department filed an appeal against the cancellation of a penalty of Rs. 1,00,000 imposed under s. 271B of the IT Act for the asst. yr. 1990-91. The assessee Corporation was required to get its accounts audited under s. 44AB of the IT Act and obtain the audit report by 31st Dec., 1990. The audit report was obtained on the due date, but it mentioned that statutory audit under the Companies Act, 1956, was not conducted. The AO initiated penalty proceedings under s. 271B, which was challenged by the assessee before the CIT(A). The CIT(A) canceled the penalty, stating that the assessee was prevented by reasonable cause from complying with s. 44AB. The Departmental Representative argued that the penalty was rightly imposed as the accounts were not audited within the specified time. However, the counsel for the assessee contended that compliance with s. 44AB was made, and the tax audit report was filed on time. The Tribunal considered the submissions and found that the tax audit report was obtained on the due date, and the reasons for delay in statutory audit were convincing. The Tribunal agreed with the CIT(A) that the assessee was prevented by reasonable cause in obtaining the statutory audit report on time. Therefore, the Tribunal upheld the deletion of the penalty under s. 271B. In conclusion, the appeal against the cancellation of the penalty under s. 271B was dismissed. The Tribunal found that the assessee had complied with the provisions of s. 44AB by filing the tax audit report on time, and there was a reasonable cause for the delay in obtaining the statutory audit report. Consequently, no penal liability was imposed on the assessee under s. 271B of the IT Act for the assessment year in question.
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