2010 (11) TMI 698

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..... .1990 and the return of income was filed along with the audit report on the same date - Therefore, that reasonable cause existed and the delay was neither deliberate nor was there any fault on the part of the assessee - Held that the Tribunal was not right in upholding the penalty - Thus, the appeal is allowed and the substantial question of law is answered in favour of the assessee.
MR. JUSTICE ADARSH KUMAR GOEL, MR. JUSTICE AJAY KUMAR MITTAL, JJ. Mr. Harminder Singh, Advocate for the appellant. Mr. Vivek Sethi, Standing Counsel for the respondents. AJAY KUMAR MITTAL, J. This appeal under Section 260A of the Income-tax Act, 1961 (for short "the Act'") has been filed by the assessee against the order dated 28.6.2000, passed by the .....

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..... ction 271B of the Act was bad for the following reasons: (a) that no proceedings for imposition of penalty under Section 271B had been initiated during the pendency of assessment proceedings which culminated on 13.11.1990 whereas notice initiating penalty proceedings under Section 271B of the Act was issued on 25.11.1992 i.e. after two years of passing of the order of assessment dated 13.11.1990. The same was bad on the ground of delay and laches. (b) Section 273B of the Act was inserted by Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1986 w.e.f. 10.9.1986 whereby no penalty under Section 271B was imposable on an assessee or any person where it was established that there existed reasonable cause for said failure. The appe .....

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..... culminated on 13.11.1990 and penalty proceedings under Section 271B had not been initiated during the course of those proceedings. However, it was initiated by issuance of notice on 25.11.1992, i.e. after passing of the assessment order on 13.11.1990. Further, as per averments of the assessee, the account books were handed over to the auditors in May, 1998 of which the auditors failed to conduct audit till the date, the same were impounded under Section 131 by the ADI (Investigation) on 20.10.1989. It was thereafter that the assessee in December, 1989, after obtaining photo copies of the record from the ADI, supplied the same to the auditors and the audit was thereafter completed on 26.4.1990. Keeping in view the peculiar facts and circums .....

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