1998 (7) TMI 139 - AT - Income Tax

Summary

Issues:
- Confirmation of penalty under section 271B of the IT Act for assessment years 1990-91 and 1991-92.
- Contradictory statements regarding the audit of accounts and tax audit reports.
- Lack of clarity on the appointment of the auditor and submission of audit reports.
- Failure to get accounts audited under section 44AB within the due time.

Analysis:
1. The appeals before the Appellate Tribunal ITAT MADRAS-D involved the confirmation of penalties under section 271B of the IT Act for the assessment years 1990-91 and 1991-92. The issue was consolidated due to common grounds and convenience.

2. The case revolved around the submission of audit reports under section 44AB of the IT Act. The Assessing Officer (AO) initiated penalty proceedings as the accounts were not audited by the due date. The authorized representative of the assessee argued that the accounts were audited and emphasized the lack of clarity on the appointment of the Chartered Accountant for tax audit purposes.

3. The Departmental Representative highlighted discrepancies in the audit reports and the responses provided by the assessee regarding the auditor's identity and the submission of audited statements. The AO and the Dy. CIT(A) confirmed the penalty based on these discrepancies and the failure to submit audited accounts within the stipulated time.

4. Upon reviewing the statements recorded by the AO, it was evident that the assessee had handed over the accounts to an auditor for tax audit in July 1992. However, audit reports signed by a different Chartered Accountant were submitted later. The Tribunal noted that the accounts were not audited by the required date, and the prescribed form printed in 1992 was not rebutted by the assessee.

5. Ultimately, the Tribunal upheld the penalty, concluding that the assessee failed to comply with the audit requirements under section 44AB within the specified timeframe. As a result, the appeals were dismissed, affirming the levy of penalties under section 271B of the IT Act for the respective assessment years.