9911796707
TMI Blog2000 (2) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... ts return of income on December 31, 1990, which was accompanied by the audit report dated October 28, 1990, obtained, by it under section 44AB of the Act. The Assessing Officer levied the penalty under section 271B of the Act on the ground that the assessee had failed to file the return along with the audit report on or before the specified date which in this case was November 30, 1990. The assessee preferred an appeal before the Commissioner of Income-tax (Appeals) who cancelled the penalty on the ground that the penalty under the said provision was imposable only if either the accounts are not audited by the prescribed date or the audited accounts are not filed along with the return of income. Thus, according to him, no penalty under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as they existed before April 1, 1995. "44AB. Every person,-- (a) carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds forty lakh rupees in any previous year ; or (b) carrying on profession shall, if his gross receipts in profession exceed ten lakhs rupees in any previous year ; get his accounts of such previous year audited by an accountant before the specified date and obtain before that date the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed : Provided that this section shall not apply to the person, who derives income of the nature referred to in section 44AC o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f section 142, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum equal to one half per cent. of the total sales, turnover or gross receipts, as the case may be, in business, or of the gross receipts in profession, in such previous year or years or a sum of one hundred thousand rupees, whichever is less." A plain reading of the aforesaid provisions shows that it provides for penalty in case of following events : (i) Failure to get the accounts audited in terms of section 44AB. This would cover cases where either the accounts are not got audited at all or are got audited but after the specified date ; (ii) Failure to obtain report of audit as required under section 44AB., This would cover cases where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be filed up to November 30, 1990. However, the assessee had filed the return on December 31, 1990, which was a return filed under sub-section (4) of section 139 and this return was duly accompanied by the audit report obtained by the assessee in accordance with the provisions of section 44AB. Thus, according to us, the default for which penalty had been levied was not covered by the provisions of section 271B and the Commissioner of Income-tax (Appeals) and the Tribunal were justified in holding that no penalty was leviable. Before parting, we would like to observe that the apprehension of learned counsel that if a penalty under section 271B was not levied in cases like the one under consideration an assessee obtaining the audit report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return along with the audit report within the time specified under sub-section (1) of section 139 and consequently no penalty for such a default has been provided in section 271B. There is no gainsaying the fact that the penal provisions have to be construed strictly and penalty can be levied only for the defaults provided therein. Neither any additional default can be read in a provision on the ground of logic nor can a default provided therein be ignored on the ground of hardship. In the present case we are satisfied that a plain reading of section 271B shows that it does not cover the default of failure to file the return along with the audit report on or before the specified date. In this view of the matter, we find no merit in these ..... X X X X Extracts X X X X X X X X Extracts X X X X
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