TaxTMI 
TaxTMI 
TaxTMI 
2016 (12) TMI 1488
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....f income, the A.O. asked the assessee to furnish Tax Audit Report as required u/s. 44AB of the Act. In spite of several notices the assessee did not furnish the required Tax Audit Report which prompted the A.O. to initiate penalty proceedings u/s. 271B of the Act. 4. During the course of the penal proceedings, the assessee was asked to show cause as to why an order imposing a penalty u/s. 271B should not be made. Assessee filed a detailed reply which reads as under:- 1.1 In response to the same, it is submitted that the assessee has preferred an appeal before Hon'ble CIT(A). Copy of Form No. 3 5 is enclosed herewith and marked the same as Annexure-1. The assessee here also relies on the provision of section 275 of the I.T. Act. for no....
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....10, assessee submits that mother of authorized representative was died on 24/11/2010, so he was unable to attend hearing on 26/11/2010 and on the same day, assessee has requested your good selves for adjournment up to 30/11/2010 which was denied by your good selves. Thus the assessee company has reasonable cause for non submission of details called for. Considering this, assessee requests your good selves to kindly drop the penalty proceedings initiated in case of it Thus looking to the provision of section 271 B it is not correct to say that once the default in complying the provisions of section 44AB is found, the levy of penalty is obligatory, mandatory and automatic. It is further stated that the use of the word 'may direct' c....
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....ing authority -whether to levy penalty or not. This is obvious from the phraseology used in the main part of section 271 B and the relevant part of it is "the Assessing Officer may direct that such person shall pay by way of penalty". Thus, the Assessing Officer may (or may not) direct that the assessee "shall pay by way of penalty..." It is submitted that the user of word "may" therein is significant insofar as it gives discretion to the Assessing Officer to levy or not levy penalty. On the aspect of such user of word "may" we now have the benefit of the Supreme Court decision in P. K. Noorjehan (1999) 237 ITR 570 (SC) wherein the point involved was whether in terms of section 69 for unexplained investment the Assessing Officer was bound t....
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.... Audited U/s 44AB of the I.T.Act and it had cited the name of the Auditor and therefore it is not liable to furnish the same before the Assessing officer during the course of assessment proceeding is not sufficient compliance of the section 44AB of the Act. It is not out of context to mention here that in this case the chartered accountant who has attended the assessment proceeding along with the director/directors of the company is the same person whose name had been mentioned by the assessee company in the electronically filed return of income. Therefore it is proved that all the requests made for furnishing of the Audit Report were the requests to him also, but both of them failed to furnish it. Further, while filing the electronic retur....
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.... the Auditor. As the A.O. has not granted the adjournment, therefore, report could not be filed is totally incorrect illogical one. 6. The A.O. completed the penal proceedings by levying penalty of Rs. 1,00,000/-. 7. The assessee unsuccessfully approached the First Appellate Authority who confirmed the levy of penalty. Before us, the ld. counsel for the assessee drew our attention to page 57 of the paper book and stated that the assessee had obtained the Audit Report u/s. 44AB of the Act on 02.09.2008 and the return was electronically filed on 28.09.2008. It is the say of the ld. counsel that the assessee has obtained the Audit Report before furnishing the return of income. The ld. counsel further stated that since the electronic return ....