9911796707
TMI Blog1996 (1) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... f such a report, a notice was issued to show cause why penalty should not be levied under section 271B of the Act. The assessee replied that as per section 619(2) of the Companies Act, the Auditor was to be appointed by the Comptroller and Auditor General of India, but no appointment had been made till the date of reply, i.e., 13-5-1991. The assessee was, therefore, prevented by sufficient and reasonable cause for not furnishing the Audit Report under section 44AB of the Act. It was stated that a similar penalty, imposed in the case of Bihar State Food Civil Supply Corporation for Assessment Year (A.Y.) 1985-86, was deleted by the CIT(A) and penalty proceedings had been dropped in the case of Bihar Panchayat Raj Vitta Nigam, Patna. Relian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t under the Companies Act could be attributable, to the Central Government. He, therefore, submitted that the penalty should be restored. 5. The ld. counsel for the assessee, on the other hand, submitted that, no doubt, the Income-tax Act, 1961, was a self-contained Code, but in the second proviso below section 44AB of the Income-tax Act, 1961, there was a recognition of audit under any other law. It was provided that where the assessee has to get his accounts audited under any other law, he may obtain such Audit Report before the specified date and a further report in the form prescribed under section 44AB. In view of this, the assessee was unable to obtain a further report in the prescribed form under section 44AB, since the main audit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs by the Central Government but inspite of time allowed and the next hearing on 10-1-1996, no such evidence was produced. The ld. counsel explained that it was not possible to produce it. 9. The Bench also invited attention of the ld. counsel to an order of the Tribunal in Income-tax Act No. 588/Pat/1992 for A.Y. 1988-89, dated 14-9-1995, where a penalty of Rs. 1 lac, levied under section 271B of the Act, in case of Bihar State Electricity Board, Patna, had been confirmed by the Tribunal. The Ld. counsel sought to distinguish the decision on facts, stating that in that case the penalty had been confirmed primarily because despite repeated opportunities at the initial stage, no reply had been given to the show-cause notices issued by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecified date and obtain before that date the report of the audit as required under such other law and a further report in the form prescribed under this section. Explanation. --- For the purposes of this section,--- (i) "accountant shall have the same meaning as in the Explanation below sub-section (2) of section 288;" 12. It is clear that under clause (a) of section 44AB of the Act, the assessee was obliged to get his accounts audited by an "Accountant" which has been defined in the Explanation below sub-section (2) of section 288, and includes a Chartered Accountant. It is a self-contained code and as rightly argued by the ld. D.R., and it is not necessary to go into the provisions of the Companies Act in order to implement it. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t under the Companies Act, no material has been placed before us to show the efforts made by the assessee for appointment of statutory auditor by the Central Government. The onus under section 273B has, therefore, not been discharged. A similar view was taken by us in the case of Bihar State Electricity Board, Patna, for A.Y. 1988-89 in I.T.A. No. 588/Pat./1992 dated 14-9-1995 and relevant extract is given below : " 9. We are also not satisfied with the explanation given before the CIT(A) and before us. It is laid down in section 273B of the Act that no penalty shall be imposable on the assessee for any failure as mentioned in section 271B of the Act "if he proves that there was reasonable cause for the said failure". Thus, the onus lies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ular No. 422 dated 19-6-1985 we agree with the ld. D.R. that the instructions are not applicable to the assessee since the audit report was not obtained by 30th September, 1985. We will however, proceed to consider whether there was a reasonable cause otherwise as held by the CIT(A). In this regard we find that the scheme of audit for public sector undertakings has not been fully kept in view by the AO or the CIT(A). The public sector undertaking undergoes a statutory audit by a prescribed firm of CAs for the purpose of compilation of accounts and preparation of the profit and loss account and the balance sheet. Returns should be filed on the basis of such audited accounts. Subsequently, the accounts are audited by officers of the office of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
