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TMI Blog2005 (1) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the court was delivered by G.S. Singhvi J.- On a petition filed by the Commissioner of Income-tax, Haryana, Rohtak, under section 256(1) of the Income-tax Act, 1961 (for short, "the Act"), the Income-tax Appellate Tribunal, Delhi Bench "E", New Delhi (for short, "the Tribunal"), has referred the following question of law for the opinion of this court: "Whether, on the facts and in the circumstances of the case, the hon'ble Tribunal was right in law in reversing the order of the learned Commissioner of Income-tax (Appeals) who confirmed the penalty of Rs. 20,064 imposed under section 271B of the Income-tax Act, 1961 by the Assessing Officer?" In terms of section 44AB of the Act, the assessee was required to file a return for the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... free to examine the authenticity of the date on which the report was stated to have been obtained. In the absence of any such evidence available on record, it could not be said that the report was obtained by October 27, 1993 as was the contention of the assessee. In the circumstances, the issue would be covered by the various decision of the Tribunal Delhi Benches as cited by the learned Authorised Representative. Respectfully following the aforesaid decision, we would delete the penalty as confirmed by the learned Commissioner of Income-tax (Appeals)." We have heard Shri Rajesh Bindal, learned counsel for the Revenue, and perused the record. In ITO v. Kaysons India [2000] 246 ITR 489, a Division Bench of this court interpreted the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve to be construed strictly and penalty can be levied only for the defaults provided therein. Neither can any additional default be read in a provision on the ground of logic nor can a default provided therein be ignored on the ground of hardship." In Mohan Trading Co. v. Union of India [1985] 156 ITR 134 and CIT v. Ramkrishna Stores [2002] 253 ITR 175, the Division Benches of the Madhya Pradesh and the Calcutta High Courts held that imposition of penalty under section 271B of the Act is not automatic and in an appropriate case, the competent authority, on being satisfied with the explanation given by the assessee, is free not to impose penalty. In ITO v. Nanak Singh Guliani [2002] 257 ITR 677, a Division Bench of the Madhya Pradesh Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B if the assessee is able to prove that there was reasonable cause for the said failure. Section 271B mandates imposition of penalty on the failure, but, by reason of the rule of evidence provided in section 273B, such imposition of penalty is dependent on the proof that there was no reasonable cause for the failure. The omission of the particular phrase from the substantive law and incorporation thereof in the procedural law bears the legislative intent to make the provision of section 271B coercive instead of penal. This amendment was intended to remove the scope of any confusion with regard to the characteristics and nature of the proceedings under section 271B. The word 'may' has been used only to accommodate the procedural law enabling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as soon as criminal liability is imposed by reason of default in compliance of a particular provision and there is some element of criminality involved in the default, the proceeding can be said to be a quasi-criminal one. The presence of the element of criminality is one of the factors that determines the question. Section 44AB imposes a liability to get the accounts audited within the stipulated time. There is nothing in the section to make it incumbent to furnish the audited accounts within the stipulated time. Failure to furnish, therefore, will not attract the mischief of section 271B though failure to get the accounts audited within the stipulated time would attract penalty." In I.T.R. No. 61 of 1995- CIT v. Ashoka Dairy, decided ..... X X X X Extracts X X X X X X X X Extracts X X X X
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