1997 (3) TMI 136 - AT - Income Tax

Summary

Issues:
1. Levy of penalty under section 271B of the Income-tax Act, 1961 for failure to furnish audit report along with the return of income.
2. Interpretation of provisions of section 271B and section 139(9) in relation to the submission of audit reports.
3. Determination of whether there was a reasonable cause for the failure to furnish the audit report along with the return of income.

Detailed Analysis:
Issue 1:
The appeal was against the penalty levied under section 271B of the Income-tax Act, 1961 for not submitting the audit report along with the return of income. The Assessing Officer found that the audit report was not filed with the return, leading to the penalty imposition.

Issue 2:
The CIT (Appeals) confirmed the penalty, emphasizing the requirement to furnish the audit report along with the return of income under section 271B. The appellant argued that the audit report was submitted but may have been misplaced. Reference was made to section 139(9) and a circular clarifying the submission of audited documents with the return.

Issue 3:
The Tribunal analyzed the facts, noting that the audit report was obtained before the specified date but may not have been attached to the return. The Tribunal considered the bona fide belief of the appellant and the subsequent submission of the audit report as a response to the notice. It highlighted the absence of a guilty intention and the timely correction of the alleged defect.

Conclusion:
The Tribunal ruled in favor of the appellant, emphasizing that there was no deliberate intent to evade the requirement of submitting the audit report with the return. It found that the appellant had a reasonable cause for the failure to attach the report initially, as evidenced by the subsequent submission and the overall circumstances. Consequently, the penalty under section 271B was canceled, directing the Assessing Officer to do the same.