9911796707
TMI Blog2006 (5) TMI 503X X X X Extracts X X X X X X X X Extracts X X X X ..... as justified in levying penalty under section 271B of the Act? 3. The facts of the present case are in a narrow compass. The assessee is private limited company engaged in the business of manufacturing and sale of Ayurvedic preparations. For the assessment year under consideration, the assessee was required to get its accounts audited and also furnish the same as per provisions of section 44AB of the Act as the assessee s turnover during the previous year relevant to the assessment year was more than ₹ 40 lakhs. The due date for filing the audit report was 30-11-2001. The assessee completed its audit as per provisions of section 44AB on 22-10-2001 but the assessee did not file its audit report till 31-3-2003 and the same was filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ber 2001, it was filed belatedly because of paucity of funds to make payment under section 140A. As already held for 2000-021 assessment year, the appellant has failed to establish a reasonable cause for not filing the audit reporting time, in spite of the alleged claim that the tax audit was actually finalized in time. The ground that delay in audit report for 2000-01 was one reason for delay in audit report for 2001-02 also does not held water, since the appellant itself confirms that the audit report for this year was finalized before the due date. Penalty stands. Appeal dismissed. Now, the assessee has challenged the impugned order before us. 4. We have heard the learned Chartered Accountant, Shri R. Sreenivasan for the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has mechanically confirmed the order of the Assessing Officer levying the penalty. The ld. AR further submitted that penalty proceedings are quasi-criminal in nature and penalty can be levied only when there is a defiance of law by a person deliberately or consciously. The ld. AR relied on the following precedents :- (i) Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26 (SC); (ii) CIT v. S.S. Banga [2005] 279 ITR 107 (Punj. Har.); (iii) Asstt CIT v. Kamlesh R. Agarwal (HUF) [2006] 282 ITR (AT) 117 (Ahd.) (TM). On the other hand, the ld. DR supported the orders of the Assessing Officer as well as the CIT(A). 5. We have heard the rival submissions of the parties. We have also carefully considered the facts of this case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be reasonable said to be a cause which prevents a man of average intelligence and ordinary prudence, acting under normal circumstances, without negligence or inaction or was of bona fides. As far as the case of the assessee is concerned, it is not disputed that the assessee was required to pay ₹ 2,77,194 as the self-assessment tax under section 140A of the Act. If we apply the parameter of the expression reasonable cause , then delay in filing the return of income for want of funds may be due to a reasonable cause. At the same time, we have to consider another aspect that section 44AB with effect from 1-7-1995 makes it mandatory on the part of the assessee to furnish the audit report even if the return of income is not filed bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was a deliberate defiance of law or the assessee is guilty of conduct contumacious or dishonest or the assessee has acted in conscious disregard of his obligation. On a perusal of the reasons given by the CIT(A), we find that the CIT(A) has treated the levy of penalty in a very casual way. The legislative intent in bringing section 273B on the statute book is that though there is a commission or omission on the part of the assessee to comply with the provisions of the Act, but no penalty should normally be imposed unless the explanation or cause for such commission or omission is not reasonable. The CIT(A) has not at all discussed anything on this issue. Moreover, as observed above, we do not find from penalty order that there was a delibe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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