9911796707
TMI Blog2017 (3) TMI 905X X X X Extracts X X X X X X X X Extracts X X X X ..... alls for decision in this income tax appeal. The appellant-assessee is a partnership firm engaged in the business of trading in goods. The return was filed by the assessee on 27.06.1996 along with the audit report in Form 3CB and 3CD of the Income Tax Act declaring the income of Rs. 5180/. Since the assessee has failed to audit the account in respect of the previous year as required under Section 44AB of the Act before the due date on 31.10.1994, penalty proceedings were initiated against the assessee under Section 271B of the Act. The assessee tendered the explanation for the delay in auditing the accounts. The assessee pointed out that the accounts of the firm were maintained manually and the firm was facing shortage of staff due to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tribunal for the first time and though the clerk working in the office of Rao & Yadav Chartered Accountants sought an adjournment of the matter on the ground that the chartered accountant of the firm was ill and the matter be adjourned, the tribunal refused to grant the adjournment and allowed the appeal filed by the revenue. Shri Bhattad, the learned counsel for the appellantassessee submitted that on the first date of hearing, the tribunal erroneously rejected the request of the assessee for adjournment and decided the appeal filed by the revenue without granting an opportunity to the appellant. It is submitted that it is casually observed by the tribunal in its order that the illness of the accountant, the resignation of the employee a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay in maintaining the accounts. The assessee had pointed out that the accountant remained absent throughout September1994 due to his illness and thereafter he suffered a paralytic attack as a result of which, he was forced to resign the job. The assessee had placed the copies of the resignation letters before the authorities to point out that the accountant and some other employees had left the job at the relevant time. The assessee had pointed out that since the accounts of the firm were maintained by the accountant and he was ill, the same could not be maintained, specially when there was a huge difference of Rs. 86,000/in the trial balance and it could not be reconciled. For proving the said fact, the assessee had produced the original ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cause for the delay, the tribunal has erroneously held that the cause were not substantiated or proved. In the circumstances of the case, the explanation tendered by the assessee should have been accepted as was rightly accepted by the Commissioner (Appeals) by considering the material on record. In the facts and circumstances of the case, in our view, penalty could not have been imposed on the assessee by rejecting the explanation of the assessee. Since the tribunal has wrongly observed that no material was placed by the assessee for substantiating the cause for the delay, the order of the tribunal cannot be sustained. Hence, by answering the substantial question of law in favour of the assessee, we allow this appeal by setting aside th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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