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TMI Blog2000 (6) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. The only issue raised by the revenue before us disputes the cancellation of penalty imposed by Assessing Officer under section 271B. The Ld. Sr. D.R. has contended that the assessee's turnover being more than Rs. 40 lacs it was necessary for the assessee to have its accounts audited under section 44AB before the specified date which, in this case, is 31-10-1993. He has contended that it was also necessary for the assessee to obtain audit report under section 44AB on or before the specified date, Le. 31-10-1993; and equally it was also necessary for the assessee to furnish report of audit under section 44AB on or before 31-10-1993. He has contended that such a requirement already existed under section 44AB read with section 271B and section 139(6A), as they stood at the relevant time. He has also referred to the decision of Hon'ble Rajasthan High Court in the case of Abhay Kumar v. Union of India [1987] 164 ITR 148. As against this, the Ld. A.R. of assessee has contended that the issue is covered by a decision of this Bench in the case of Asstt. CIT v. Shanker Lal Agarwal [IT Appeal No. 247 (Jp.) of 1994, dated 4-5-2000] a copy of which has been placed on record. However, as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt under section 44AB within the specified date. Furnishing of audit report under section 44AB was not a requirement under section 44AB prior to 1-7-1995, and the said requirement has come under section 44AB only w.e.f. 1-7-1995 which did not exist prior thereto, nor, in turn, in A.Y. 1993-94, the one under appeal. As such during A.Y. 1993-94 the provision of section 44AB, as it stood at the relevant time, did not require the assessee to furnish the audit report under section 44AB. 6. Now coming to the provision of section 139(6A) the same may, for advantage, be quoted here as under :--- 'Return of income --- 139(6A).--- Without prejudice to the provision of sub-section (6), the prescribed form of the returns referred to in this section and in clause (i) of sub-section (1) of section 142 shall in the case of an assessee engaged in any business or profession also requires him to furnish the report of any audit referred to in section 44AB ......" In the above provision the words "the report of any audit" were inserted in this provision by amendment vide Finance Act, 1988 w.e.f. 1-4-1989, and the words "referred to in section 44AB" were inserted by amendment vide Finance Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see did not rectify the defect nor did the assessee file the audit report, the leviability of penalty under section 271B for the aforesaid default of section 139(6A) still remains question marked for the reason that the penalty under section 271B is leviable in some specific situations. In order to appreciate the same we may quote the relevant portion of section 271B, as applicable prior to 1-7-1995, as under :--- "obtain a report of such audit as required under section 44AB or furnish the said report along with return of his income filed under sub-section (1) of section 139 or along with the return of income furnished in response to notice under clause (t) of sub-section (1) of section 142." A perusal of the above provision makes it clear that the penalty thereunder is leviable for the following defaults :--- (i) failure to obtain report of audit under section 44AB; (ii) failure to file report of audit under section 44AB along with return of income which is filed under section 139(1); and (iii) failure to file report of audit under section 44AB with the return of income which is filed in response to notice under section 142(1)(i). As such it is clear from the above a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not a return filed under section 139(4) but one filed under section 139(1). Therefore, the requirement ordained in section 271B vide situation mentioned at item no. (ii) above is not applicable to the matter in hand. 10. As regards the situation mentioned at item (i) above we will discuss the same ahead separately as the same involves some other disputes also requiring factual analysis. 11. It is clear from the above discussion that section 271B, as it stood at the relevant time, did not require the assessee to furnish the report of audit under section 44AB along with return of income inasmuch as the assessee's return of income was not filed under section 139(1) but was filed under section 139(4). At this juncture it may also be observed that the words "referred to in section 44AB" qualifying the audit report have been inserted in section 139(6A) by Finance Act, 1995 w.e.f. 1-7-1995 only and the assessment year under appeal being 1993-94, the penalty under section 271B is not leviable for non-compliance of section 139(6A). 12. Now coming to the provision of section 271B, the position of the said provision as it stood prior to 1-7-1995 alone is relevant in this case and the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leviable for default of furnishing of audit report required under section 44AB within specified date was not in issue before the Hon'ble High Court. In the circumstances the above referred observations of the Hon'ble High Court as made on page 165 of the reported judgment may not be the ratio decidendi of the case but only obiter dicta, as has been argued by the Ld. A.R. of the assessee. The contention of the Ld. A.R. of the assessee has further been that the Obiter dicta of the Hon'ble Apex Court of the land may have the binding nature and be operative as precedent but not the Obiter dicta of an Hon'ble High Court and this contention cannot be said to be without force. It has been held by the Hon'ble Calcutta High Court in the case of Mahaliram Ramjeedas. In re, [1938] 6 ITR 265 that the Obiter dicta of High Court did not operate as res-judicata nor was it binding on I.T. authorities. In Goodyear India Ltd v. State of Haryana [1991] 188 ITR 402 (SC), the Hon'ble Supreme Court has held that a judgment is an authority only for what it decides and not for what may remotely or even logically follow. It has also been held therein that a decision even on question not argued cannot be t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at in the circumstances the revenue does not get any benefit from the decision of Hon'ble jurisdictional High Court in the case of Abbey Kumar. 13. In view of the discussions made above, we are of the view that prior to amendment of sections 271B 44AB vide Finance Act, 1995 w.e.f. 1-7-1995, penalty for non-furnishing of audit report required under section 44AB within specified date was not leviable. As such the assessment year under appeal being 1993-94 the penalty under section 271B for non-furnishing of audit report under section 44AB on or before 31-10-1993, the specified date, was not leviable on assessee. 14. However, the Assessing Officer has in his order, largely discussed the non-getting of the accounts audited within the specified date 31-10-1993 as also non-obtaining of the report of such audit under section 44AB within 31-10-1993, though the Ld. CIT(A), in his order, discussed only the non-furnishing of the audit report under section 44AB. From the perusal of the record we find that the Assessing Officer has drawn his conclusion regarding the assessee having not got its accounts audited under section 44AB by 31-10-1993, nor having the audit report under section 44A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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