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TMI Blog2022 (3) TMI 764X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of assessee whose accounts are required to be audited on any other law will have to commence his work only on the basis of such audited accounts together with information required to be submitted in Form 3CD. Being a public sector unit, the assessee company after completion of statutory audit under Companies Act is required to obtain report by CAG. The assessee accounts for the year ended 31.03.13 were not finalized and audited before the specified dated i.e. 30th September 2013. The statutory audit was completed only on 23rd January 2014 and the reports from the CAG was obtained in March 2014, thereafter the tax audit report was undertaken only after April 2014 and the report u/s. 44AB was obtained on 17th September 2014. These ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in confirming penalty levied by A.O. U/s. 271B of the IT Act 1961 without considering provisions of Sec. 273B of the Income Tax Act 1961. 3. The learned CIT(A) considering the facts and circumstances of the case ought to have held that the Appellant had a reasonable cause for delay in obtaining Tax Audit Report u/s. of the Income Tax Act 1961 and further held that penalty u/s. 271B of ₹ 1,50,000/- was not leviable. 4. It is submitted that the learned CIT(A) ought to have directed the D.C.I.T. to cancel the order levying penalty U/s. 271B. 5. The appellant craves leave to add, amend or alter any of the grounds of appeal or to add any further grounds of appeal if considered necessary. 2. The chronology of the ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the tax audit report in Form 3CD was filed with much delay only on 17.09.2014 and the assessee has thus failed to comply with the provision of section 44AB of the Act. Accordingly, penalty proceedings u/s. 271B of the Act was initiated by the AO at the time of passing the assessment order on 04.03.16 by issuing show cause notice u/s. 274 r.w.s. 271B of the Act on 04.03.16 for its failure to comply with the provisions of section 44AB of the Act. In pursuant to this, the order u/s. 271B of the Act was passed by the AO on 28.09.16 levying penalty of ₹ 1,50,000/- which was subsequently confirmed by Ld. CIT(A) on 27.02.19. Consequent upon such order passed by Ld. CIT(A), assessee is in further appeal before the Tribunal. 4. Ld. AR submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the proceedings before the AO and Ld. CIT(A). The provision of section 273B may be highlighted hereunder which states that no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provisions, if he proves that there was reasonable cause for the said failure. 7. The fate of the appeal depends upon the answer to the question whether there was reasonable cause for the delay in filing the audit report by the assessee company. Therefore, it is necessary to peruse the facts stated by the assessee being a public sector company wholly owned by Air India Ltd. which was wholly owned by Govt. of India will come under the purview of section 44B which requires every person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a reasonable cause and was not due to any intentional or deliberate act on his part. Thus, the subsequent act of the assessee in obtaining the audit report becomes relevant for judging the reasonableness or otherwise of the cause shown by the assessee for not complying with the requirements of section 44AB before the specified date. 8. Similar view has been taken by Hon'ble Calcutta High Court in the case of CIT vrs. Capital Electricals (Garaihat) reported in 261 ITR-4. It has also been held in this decision that mere failure to file audit report on time will not justify the levy of penalty as power u/s. 271B is discretionary. The same view has also been taken by the Hon'ble Madras High Court in the case of Thanjavur Silk Handl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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