2009 (8) TMI 640 - HC - Income Tax

Penalty- The assessee got its accounts audited within the specified time and filed the report with its return within the time allowed under section 139(4) of the Act. The Assessing Officer took the view that the audited accounts was required to be filed within the time specified under section 139(1) and imposed penalty. The Commissioner (Appeals) upheld the order of the Assessing Officer. The Tribunal cancelled the penalty imposed under section 271B of the Act on the ground that no penalty was exigible if the audit report was obtained within the specified time, though not furnished within the time allowed for filing of the return under section 139(1) of the act. held that- the Tribunal had rightly deleted the penalty u/s 271b of the Act.

Summary

The High Court of Allahabad, in the case of 2009 (8) TMI 640 - ALLAHABAD HIGH COURT, addressed a question of law referred by the Income-tax Appellate Tribunal regarding the cancellation of a penalty under section 271B of the Income-tax Act, 1961. The case involved an assessment year of 1990-91, where the assessee had obtained an audit report before the specified date but filed the report after the allowed time for filing returns. The Assessing Officer imposed a penalty of Rs. 42,242, which was upheld by the Commissioner of Income-tax (Appeals) but later cancelled by the Tribunal. The High Court, in line with a previous decision, ruled that the penalty under section 271B could not be imposed in this case, leading to the deletion of the penalty. The court's decision was based on the interpretation of the law prior to its amendment by the Finance Act, 1995. The judgment was given in favor of the assessee, with no costs awarded.