TaxTMI 
TaxTMI 
2010 (9) TMI 887
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....ment year 1991-92, proposing following substantial question of law:- "That whether under the facts and circumstances of the case and on the true interpretation of the provision of the Act the Hon'ble Tribunal was justified in upholding the levy of penalty u/s 271B for delayed filing of the audit report in response to the proceedings u/s 148 and before the completion of the assessment?" 2. Facts necessary for adjudication as narrated in the appeal may be noticed. The assessee filed his return on 3.9.1991 declaring an amount of Rs.40,720/-. The search was conducted on 7.9.1993 under Section 132 of the Act on the premises of M/s Sarup Singh and Company and group cases and notice under Section 148 of the Act was issued on 31.10.1995 for n....
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....ssee to approach this Court by way of instant appeal. 3. We have heard learned counsel for the parties and perused the record. 4. Learned counsel for the appellant submitted that the accounts of the assessee were audited on 8.6.1991, i.e. before the filing of the return, but the audit report was misplaced and, therefore, the same could not be filed along with the return. According to the learned counsel, penalty under Section 271B, as it stood at the relevant time, could be imposed for not filing the audit report along with the return which was filed under Section 139(1) or in response to notice issued under Section 142(1) but Section 271B was not attracted where the assessee had failed to file the audit report along with the return f....
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....f one hundred thousand rupees, whichever is less." 8. A Division Bench of this Court in Kaysons India's case (supra) while interpreting Sections 44AB and 271B, as they stood prior to 1.7.1995, had observed as under:- "A plain reading of the aforesaid provisions shows that it provides for penalty in case of following events: (i) Failure to get the accounts audited in terms of section 44AB. This would cover cases where either the accounts are not got audited at all or are got audited but after the specified date; (ii) Failure to obtain report of audit as required under section 44AB. This would cover cases where the accounts are duly got audited but the audit report on the prescribed form is not obtained be....
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....rnishing the audit report along with such a non-existent return. The return under sub- section (1) of section 139 in this case could be filed up to November 30, 1990. However, the assessee had filed the return on December 31, 1990 which was a return filed under sub-section (4) of section 139 and this return was duly accompanied by the audit report obtained by the assessee in accordance with the provisions of section 44AB. Thus, according to us, the default for which penalty had been levied was not covered by the provisions of section 271B and the Commissioner of Income-tax (Appeals) and the Tribunal were justified in holding that no penalty was leviable." 10. It is not in dispute that the original return declaring an income of Rs.40,720/....