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TMI Blog2013 (12) TMI 767X X X X Extracts X X X X X X X X Extracts X X X X ..... grounds of appeal by the assessee for both the years. 3. First we take up the appeal for A.Y. 2004-05. Facts in brief are that notice u/s.148 was issued to the assessee on 26-03-2010 since no return of income was furnished either u/s.139(1) or 139(4) of the I.T. Act. In response to the same, the assessee filed return of income on 03-12-2010 declaring total loss at Rs.2,10,317/-. During the course of assessment proceedings the Assessing Officer noted that the assessee has failed to audit its books of account as required u/s.44AB of the I.T. Act and furnish such audit report on or before the due date. He, therefore, initiated penalty proceedings u/s.271B r.w.s. 274 of the I.T. Act and asked the assessee to explain as to why penalty u/s.271B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t it became clear that the APMC no more remains a local authority and hence not entitled to exemption u/s.10(20). The circular issued by CBDT vide Circular No.387 dated 06-07-1986 clarifying the compulsory audit of accounts of certain persons was brought to the notice of the Assessing Officer. It was submitted that there is no total failure on the part of the assessee since the books of accounts were maintained and duly audited by the cooperative department auditors. Only due to ignorance of the said provisions and amendment that the assessee was prevented by reasonable and sufficient cause for not obtaining and furnishing the audit report in Form No.3CA and 3CD. Relying on various decisions it was submitted that the penalty proceedings ini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The income of the appellant interalia includes rental income, fee/commission on sale of agricultural produce and payments received for providing various other services related to storage and marketing of the agricultural produce. It is an undisputed fact that the appellant has not complied with the provisions of section 44AB of the IT Act and did not file the audit report before the A.O, for assessment year 2004-05. As per the amended sec.10(20) of the IT Act 1961 applicable w.e.f. A.Y. 2003- 04, the appellant was not exempted from income tax and hence was liable to file return. Since the receipts are higher than the monetary limit prescribed in sec.44AB, the appellant was required as per IT Act to get the accounts audited by a specified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... insertion of Explanation to section 10(20), APMC no more remains a local authority, hence not entitled to exemption u/s.10(20). This was clarified by the Hon'ble Supreme Court in the case of Agricultural Produce Market Committee, Narela Vs. CIT and Another (Supra). Under these circumstances, we find merit in the submission of the Ld. Counsel for the assessee that although the accounts of the assessee are maintained and audited by the auditors appointed by the cooperative department, however, due to confusion and bona fide belief the assessee did not get its accounts audited u/s.44AB and obtain such audit report before the due date. 6.1 We find the Ld.CIT(A) upheld the penalty levied u/s.271B by the Assessing Officer on the ground that ign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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