9911796707
TMI Blog2002 (10) TMI 233X X X X Extracts X X X X X X X X Extracts X X X X ..... n 5th Feb., 1998 was treated as appeal for asst. yr. 1991-92. Appeals for asst. yrs. 1992-93 to 1994-95 were filed on 18th March, 1998 removing the defect. Therefore, there occurred a delay of 36 days. It is submitted that the delay was due to bona fide belief of the assessee that only one appeal was to be filed against one consolidated order of learned CIT(A). At the time of hearing, learned authorised representative submitted that the assessee was prevented by a sufficient cause to file appeals within time. At the most, default, if any, is merely technical one, as one consolidated appeal was filed on 5th March, 1998, i.e., within time. Therefore, the delay be condoned. Learned Departmental Representative submitted that the appeals should not be admitted, being time-barred. After hearing the rival submissions, we find it a fit case for condonation of delay and accordingly we condone the delay and proceed to decide the appeals on merit. 3. Brief facts of the case are that the assessee is a Government corporation. As per provisions of s. 619 of the Companies Act, the auditors have to be appointed by the Central Government, in consultation with the Comptroller and Auditor General ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the action taken on the queries raised by us during our routine audit, so that we may take up the finalisation of each unit. However, we have not so far received replies from all the units/depots and this is the reason for delay in audit." The assessee filed its reply on 2nd Dec., 1996 to the effect that it is making efforts to get the audit completed. AO observed that the delay in appointment of statutory auditors was due to late receipt of accounts from HP State Forest Corpn. Ltd. by the CAG and no audited balance sheet had been filed in income-tax record, although a period of four years had elapsed. A DO letter dt. 4th Sept., 1996 was also addressed to the senior Deputy Accountant General, whose office informed that the auditors are appointed on yearly basis when accounts for the previous year are completed. Although, appointment of auditors for asst. yrs. 1989-90 and 1991-92 to 1994-95 had already been made 26th March, 1993 and 8th Sept., 1995 respectively, yet accounts for asst. yrs. 1992-93 to 1994-95 were awaited from the corporation. Thus, on the basis of letter from the office of senior DAG, the AO took the view the delay in completion of accounts for submission to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the auditors are to be appointed, after submission of accounts by the assessee to the CAG. Even there is no such provision for submission of accounts to the CAG. In case accounts are not properly maintained, auditor is bound to qualify his report. Our attention is drawn to the provisions of s. 619 of the Companies Act also and it is reiterated that there was no fault on the part of the assessee and assessee was prevented by reasonable/sufficient cause to comply with the provisions of s. 44AB and the impugned penalty deserves to be deleted. Reliance is placed on the following decisions: (i) Dy. CIT vs. Goindwal Industrial Investment Corporation of Punjab Ltd. (2001) 70 TTJ (Chd) 589 : (2001) 76 ITD 76 (Chd); (ii) Ahmedabad Co-op. Dept. Stores (Apna Bazar) vs. ITO (2001) 73 TTJ (Ahd) 784; (iii) Kripa Industries (I) Ltd. vs. Jt. CIT (2002) 76 TTJ (Pune) 502; (iv) CIT vs. Punjab State Leather Development Corporation Ltd. (2001) 171 CTR (P H) 451; and (v) Rajasthan Co-op. Dairy Fed. Ltd. vs. Dy. CIT (2002) 176 CTR (Raj) 622. It is contended that, if the previous year's audit is pending, no penalty need be imposed as the accounts for the current year cannot be compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er is less." From the above, it is clear that s. 271B contemplates three situations when penalty can be imposed, which are:- (a) failure to get the accounts audited; or (b) failure to obtain such audit report as required under s. 44AB; or (c) failure to furnish such audit report along with the return of income filed under s. 139(1)/142(1). From p. 1 of the penalty order, we find that the AO has initiated penalty proceedings because the assessee has failed to get its accounts audited under s. 44AB and has not filed report. AO while imposing penalty did not mention which of the default out of three situations has been committed. He simply observed that the assessee is in default in terms of s. 271B and ultimately imposed the impugned penalty. The case of the assessee cannot fall under situation (a) because audit was completed for all the assessment years on 2nd Aug., 1994, 28th Sept., 1995, 13th March, 1997 and 20th Jan., 1998. Default, as per the AO, remains in respect of situation (b). In situation (b), the penalty is imposable if the person fails to obtain a report of such audit as required under s. 44AB. 6.1 Audits are carried out under the various statutes. Und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of the audit as required under such other law and a further report in the form prescribed under this section. We find that r. 6G prescribes the proforma in which audit report under s. 44AB is to be furnished. Form 3CA is applicable to the assessee, which is required to get its accounts audited under any other law. Under Form 3CA, we find that the person who carries out audit under s. 44AB has to annex copy of the audited P L a/c and balance sheet in respect of the audit carried out by the other person under the provisions of the Companies Act. The assessee is a Government corporation and auditors have to be appointed in accordance with the Companies Act. Therefore, until and unless audit under the Companies Act is completed, audit report as given under form 3CA cannot be submitted in respect of audit carried out under s. 44AB. Thus, on totality of facts and circumstances of the case, we are of the opinion that the assessee was prevented by a sufficient cause to comply with the provisions of s. 44AB. 6.3 We have also gone through the case laws relied upon by the assessee. In the case of Rajasthan Co-op. Dairy Federation Ltd., it is clearly held that non-appointment of auditors ..... X X X X Extracts X X X X X X X X Extracts X X X X
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