Tribunal cancels penalty under section 271B for 1991-92 assessment year citing lack of notice

The Tribunal dismissed the Revenue's appeal against the deletion of the penalty under section 271B for the assessment year 1991-92. The Tribunal upheld the cancellation of the penalty based on the argument that no notice specifically for the audit report was given, and the return was not considered defective. Additionally, the failure to furnish the audit report was attributed to the mistake of the counsel, deemed a reasonable cause by the Tribunal, leading to the dismissal of the Revenue's appeal.

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Issues:
Appeal against deletion of penalty under section 271B for assessment year 1991-92.

Analysis:
The Revenue challenged the cancellation of penalty of Rs. 23,616 imposed under section 271B for contravention of section 44AB. The Departmental Representative argued that the audit report was not furnished along with the return, leading to penalty initiation. The authorized representative of the assessee contended that no notice was given specifically for the audit report, and the return was not defective. The representative cited legal precedents to support the argument that the penalty contravened the principle of natural justice. The Tribunal differentiated between requirements under section 139 and section 44AB, emphasizing the independence of filing the audit report under section 44AB. The Tribunal clarified the necessity of issuing a notice under section 139(9) for rectifying defects and the impact on penalty imposition. Since the AO did not consider the return defective and proceeded with assessment, the penalty under section 271B was not applicable.

Regarding the reasonable cause aspect, the authorized representative of the assessee argued that the failure to furnish the audit report was due to the mistake of the counsel, not the assessee. Despite the lack of formal evidence, the Tribunal accepted the claim attributed to the counsel. Considering the facts, legal precedents, and the CIT(A)'s decision to cancel the penalty based on a reasonable cause, the Tribunal upheld the cancellation of the penalty under section 271B. The Tribunal found that the failure to furnish the audit report was due to a reasonable cause, leading to the dismissal of the Revenue's appeal.

In conclusion, the Tribunal dismissed the Revenue's appeal against the deletion of the penalty under section 271B for the assessment year 1991-92.

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