TaxTMI 
TaxTMI 
2000 (1) TMI 173
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....O initiated penalty proceedings under s. 271B on 25th March, 1992, much before the completion of assessment proceedings on 28th Sept., 1992. After giving an opportunity of being heard to the assessee, he levied a penalty of Rs. 81,656. 3. The assessee appealed to the CIT(A) and submitted various reasons which prevented it to comply with the said requirements, namely, obtaining tax audit report and filing of the return of income. These reasons are: (1) The destruction of records and accounts due to fire that broke out on 9th Nov., 1988, and 16th Jan., 1992. (2) The embezzlement of cash of Rs. 35,000 by the employee during this previous year. (3) Smt. Nandubai Navlakha, mother of Shri Nainsukh Navlakha, a partner of the firm and grandmoth....
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....nancial year 1989-90 relevant to the asst. yr. 1990-91, i.e. the year under appeal. The entire records and account were destroyed and the firm had to prepare the accounts of financial year 1988-89 which it could complete on 24th Oct., 1989, and the return of income for asst. yr. 1989-90 was filed on 5th Feb., 1990. Thereafter, the firm started preparation of the accounts of the financial year 1989-90 only after 24th Oct., 1989, and could completes its accounts on 14th April, 1991. He drew my attention to p. 12 of the paper book which is a copy of the letter addressed to the Pune Municipal Corporation informing about the fire that broke out on 9th Nov., 1988. He also drew my attention to pp. 13 and 14 of the paper book which contain the repo....
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....r was passed on 28th Sept., 1992. Intimation under s. 143(1)(a) was made on 25th March, 1992, without mentioning initiation of penalty proceedings. The assessment order under s. 143(3) was made' on 18th Dec, 1992. In this order also, there is no mention of initiation of penalty proceedings under s. 271B. He submitted that under s. 275(1) penalty proceedings have to be initiated in the course of assessment proceedings. In this case assessment under s. 143(3) was passed nine months after the initiation of penalty proceedings and thus, it is clear that penalty proceedings were not initiated in the course of assessment proceedings. On this ground also, penalty cannot be upheld in view of the decision of the Ahmedabad Bench "B" of the Tribuna....