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Issues Involved:
1. Condonation of delay in filing appeals. 2. Imposition of penalty under Section 271B of the IT Act for failure to obtain and furnish audit reports on time. 3. Validity of penalty proceedings initiated before the completion of assessments. 4. Reasonable cause for delay in obtaining audit reports due to late appointment of auditors by the Central Government. Issue-wise Detailed Analysis: 1. Condonation of Delay in Filing Appeals: The appeals for the assessment years 1992-93 to 1994-95 were filed after a delay of 36 days. The assessee argued that the delay was due to a bona fide belief that only one consolidated appeal was required against the consolidated order of the CIT(A). The Tribunal found this to be a sufficient cause and condoned the delay, allowing the appeals to be decided on merit. 2. Imposition of Penalty under Section 271B: The assessee, a Government corporation, failed to file audit reports under Section 44AB for the assessment years 1991-92 to 1994-95 within the stipulated time. The AO imposed a penalty of Rs. 1 lakh for each assessment year under Section 271B. The CIT(A) upheld the penalty, stating that obtaining an audit report by the specified date is mandatory and failure to do so attracts penal action. 3. Validity of Penalty Proceedings Initiated Before Completion of Assessments: The penalty proceedings were initiated before the completion of assessments for the relevant years. The assessee argued that this made the penalty proceedings invalid, citing the case of Asstt. CIT vs. Kamdhenu Food Products. However, this argument was not further elaborated upon in the judgment as the primary focus remained on the reasonable cause for the delay. 4. Reasonable Cause for Delay in Obtaining Audit Reports: The assessee contended that the delay in obtaining audit reports was due to the late appointment of auditors by the Central Government, which is required under Section 619 of the Companies Act. The auditors were appointed late, and the audit work was completed late, making it impossible to file returns before the due date. The Tribunal noted that the assessee was a Government corporation and did not have control over the appointment of auditors by the Central Government. The Tribunal also observed that there is no provision in Section 619 that mandates the submission of accounts to the CAG before the appointment of auditors. The Tribunal referred to various case laws, including: - Dy. CIT vs. Goindwal Industrial & Investment Corporation of Punjab Ltd. - Ahmedabad Co-op. Dept. Stores (Apna Bazar) vs. ITO - Kripa Industries (I) Ltd. vs. Jt. CIT - CIT vs. Punjab State Leather Development Corporation Ltd. - Rajasthan Co-op. Dairy Fed. Ltd. vs. Dy. CIT These cases supported the view that delays attributable to the late auditing by statutory auditors and the non-appointment of auditors by the concerned authorities constitute a reasonable cause. The Tribunal concluded that the assessee was prevented by sufficient cause from complying with the provisions of Section 44AB and thus, the penalty under Section 271B should not be imposed. Conclusion: The Tribunal set aside the order of the CIT(A) and canceled the penalty imposed by the AO for the assessment years 1991-92 to 1994-95. The appeals were allowed, and it was deemed unnecessary to address other legal issues raised by the assessee.
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