1992 (5) TMI 69

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....e ITO initiated penalty proceedings under s. 271B and issued a show cause notice to the assessee. In reply, it was contended that no default under s. 271B was committed, inasmuch as, the said section envisaged the audit of accounts to be completed and the audit report obtained prior to a particular date and that being 31st Oct., 1989 in the present case. The further requirement of law, according to the assessee was the filing of the said report along with the return of income and since both the aforesaid conditions had been satisfied there was no question of imposing any penalty. 3. The ITO considered the aforesaid reply of the assessee and thereafter set out the various conditions envisaged by s. 271B r/w s. 44AB of the IT Act, 1961 and....

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....or such default. A reference was also made to the fact that the self assessment tax amounting to Rs. 144 had also been deposited with the Advocate on31st Oct., 1989. On the basis of the aforesaid arguments it was contended that no penalty be levied inasmuch as, there was a reasonable cause for the delay in the filing of the return. 5. The CIT(A) on a perusal of the record and after examining the aforesaid submissions proceeded to cancel the penalty. According to him, the delay attributable to the counsel could not be used to penalise the assessee. He also referred to the statement made before him during the course of hearing by the said counsel to the effect that the return had been handed over by the appellant in his office before31st O....

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....ined either in law or on the facts of the case. It is not disputed between the parties that the audit report dt.26th Sept., 1989was available with the assessee prior to the "specified" date and that being31st Oct., 1989. This was the requirement of s. 271B r/w s. 44AB prior to the amendment brought about by the Finance Act, 1988, w.e.f.1st April, 1989. The change in the law w.e.f. asst. yr. 1989-90 provided that the audit report was required to be appended along with the return of income filed under s. 139(1) or filed in response to a notice under cl. (i) of sub-s. (1) of s. 142. Under the aforesaid two situations a penalty under s. 271B was provided for any lapse. The other amendment which came about was the omission of the words "without ....