9911796707
TMI Blog2004 (3) TMI 362X X X X Extracts X X X X X X X X Extracts X X X X ..... e brief and relevant facts are that the ITO levied the penalty for non-filing of the audit report along with return. The penalty was levied by the ITO for not obtaining the audit report as required under s. 44AB of the Act by the assessee within the stipulated time. The case of the assessee is that the audit report dt. 30th June, 1988, was obtained and as such it had complied with the statutory obligation envisaged under s. 44AB of the Act. According to the learned Authorised Representative, levy of penalty under s. 271B is not tenable in the eyes of law in this case because it was based on surmises and conjectures, since the assessee had obtained the audit report in time but failed to file the same along with return. According to the learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of income-tax proceedings, the ITO recorded the statement of Sh. Pawan Kumar, partner, on 17th Sept., 1991, wherein he stated that the audit of the firm's accounts was got done by the Munim Sh. Sunder Singh, who was no longer in India and had gone to Nepal. The ITO completed the best judgment assessment on 18th March, 1994, and the statement of the auditor was also recorded by the ITO during assessment proceedings, wherein he confirmed that he had audited the accounts as per the records given. It is a fact that notice under s. 48 was issued to the assessee by the ITO after gathering knowledge from the sales-tax Department, as mentioned above. The assessee produced the audit report dt. 30th June, 1988, which, according to the assessee, wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s action of the AO can help the assessee in another way that he was not definite about the audit report if it was not obtained within the stipulated time or he was levying the penalty only for not filing of the same along with return. This is undisputed fact in this case that the assessee did not want to file the return, considering the income below taxable limit. The only fact now remains is whether the assessee had obtained the requisite report or not. The case of the Department is that the assessee did not obtain the report at all and even if the report dt. 30th June, 1988, is considered to be genuine, it is ante-dated. But we are unable to accept the ITO's version because he cannot be allowed to blow hot and cold together. Either he is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mstances were coupled with the reasons of penalty proceedings having been completed before the assessment order. So, all these circumstances together make out a reasonable cause for deletion of penalty. In that view of the matter, this case helps the case of the assessee. In this case, it seems that the Department did not do full home work to discharge its duty. The Department did not go into the fact that the records were lost in transit and when the auditor was examined by the Department, he also categorically stated that he had given the audit report as required under s. 44AB in the case of the assessee. It is not worth to doubt the genuineness of the report and the time of its filing. 5. In the result, we delete the impugned penalty an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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