2004 (5) TMI 238 - AT - Income Tax

Summary

Issues: Penalty under Section 271B for the assessment years 1999-2000 and 2000-01.

Analysis:
1. The appeals before the Appellate Tribunal concerned the penalty under Section 271B for the assessment years 1999-2000 and 2000-01. The common issue in both appeals was the penalty related to the turnover exceeding Rs. 40 lakhs per annum and the obligation to file audit reports under Section 44AB of the IT Act.

2. The Assessing Officer (AO) initiated penalty proceedings under Section 271B for both assessment years due to the delay in filing audit reports. The AO held the assessee liable for penalties of Rs. 37,540 and Rs. 53,600 for the respective years, citing lack of response to notices issued.

3. The CIT(A) upheld the penalties, noting that the explanation provided by the assessee was stereotypical and lacked evidence. The CIT(A) distinguished a previous judgment where reasonable cause was established, stating that in this case, no such cause was proven.

4. The assessee appealed to the Tribunal, arguing that no proper notice was served before imposing penalties. The assessee claimed that the delay was due to the advocate's mistake and should not result in penalties, citing the Hindustan Steel Ltd. case. The Tribunal noted discrepancies in the assessee's claims and found that the notices were received, contradicting the assessee's assertions.

5. The Tribunal analyzed the claim of reasonable cause, highlighting the lack of evidence supporting the assessee's explanations. The Tribunal noted attempts to mislead the Bench, such as submitting an unsigned and unnotarized affidavit. The Tribunal concluded that the assessee failed to establish reasonable cause for the delay in filing audit reports, upholding the penalties imposed by the Revenue Authorities.

6. Considering the facts and contradictions in the case, the Tribunal dismissed the appeals, affirming the penalties under Section 271B for both assessment years. The Tribunal found no merit in the assessee's arguments and upheld the penalties imposed by the Revenue Authorities.