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TMI Blog2019 (7) TMI 352X X X X Extracts X X X X X X X X Extracts X X X X ..... ort. But in form no. 3CB, since that deals with the case of an assessee whose accounts have not been audited, mandates of comprehensive audit report. Therefore, when an assessee had furnished the tax audit report in form no. 3CB then it cannot be said that it has not complied with the provisions of section 44AB merely because the report is not in form no. 3CA. Thus, we are of the view that in the assessee s case, form no. 3CB audit report with form no. 3CD is a sufficient compliance and hence penalty should not be levied. Therefore, we delete the penalty levied - Decided in favour of assessee. - ITA No.2065/Kol/2018 - - - Dated:- 28-6-2019 - Shri S.S.Viswanethra Ravi, JM And Dr. A.L. Saini, AM For the Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee admitted that it had only submitted audit report in form 3CB and 3CD; therefore AO was in the opinion that the assessee failed to carry out statutory Audit and failed to file the Audit report in prescribed forms. Therefore Assessing Officer imposed penalty u/s 271B of the Act to the tune of ₹ 1,50,000/- for not furnishing statutory audit report in proper form. 4. Aggrieved by the penalty order passed by the Assessing Officer the assessee carried the matter in appeal before the Ld. CIT(A) who has confirmed the penalty u/s 271B observing the following: 4. Ground nos. 1,2 and 3 are taken up together by the appellant since all these ground pertained to penalty so imposed by A.O. u/s 271B. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , no bonafide reasons were also furnished before the A.O. for nonfiling of the Audit Report in Form 3CA and hence A.O. s action in such respect is upheld and hence all the grounds of the appellant are dismissed. Aggrieved by the order of the Ld. CIT(A) the assessee is in appeal before us. 5. The ld. Counsel for the assessee reiterated the submissions made before the authorities below whereas the ld. DR has primarily reiterated the stand taken by the Assessing Officer which we have already noted in our earlier para and the same is not being repeated for the sake of brevity . 6. We have heard both the parties and perused the material available on record. We note that sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... audit report in Form 3CB along with Form 3CD on 27 September 2013 (refer - Page 42 to Page 51 of paper book). In connection with the above, the assessee placed reliance on Circular no. 561 dated 22nd May, 1990, issued by the Central Board of Direct Taxes (refer- Page 154 of paper book). The important extracts of the circular is given below: 4. The Board have considered the matter and are of opinion that as the income of the previous year is chargeable to tax and, for the purpose of Income Tax Act, the previous year is the financial year, the tax auditor would have to carry out the audit under section 44AB in respect of the period covered by the previous year, i.e., the relevant financial year. The proviso to the aforesaid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per the provisions of sec. 44AB. In such a situation the assessee is left with no other alternative but to furnish the report in form 3CB along with form 3CD to make substantial compliance with the provisions of section 44AB. If we accept the interpretation placed on 2nd proviso to section 44AB by ld. CIT(DR) then it would result in furnishing the TAR only after the statutory audit is completed under other provision of the relevant Act. In our humble opinion, this is not the object of incorporation of 2nd provision to section 44AB. It is well settled law that proviso cannot expand or limit the construction of principle provision. It is cardinal principle of interpretation that the language of a proviso is to be construed in relation to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ec. 44AB merely because the report is not in form 3CA which was not possible for assessee to furnish. It is well settled law that law does not require an assessee to do impossible. It is further noticeable that form 3CB, form 3CA are not mutually exclusive but form 3CA is only supplemental to form 3CB. 8. We note that the assessee has filed form no. 3CD and 3CB and the same has not been disputed therefore the tax audit report was on record and hence the penalty should not be levied. However the Assessing Officer disputed that instead of form no.3CB audit report should be in form no. 3CA. We note that the difference in form no. 3CA and form no. 3CB is that in form no. 3CA, the auditors are not required to give separate aud ..... X X X X Extracts X X X X X X X X Extracts X X X X
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