2005 (3) TMI 824

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....under section 256(1) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') for opinion to this Court. "Whether on the facts and in the circumstances of the case, the Tribunal was legally justified in upholding the Commissioner (Appeals)'s action in cancelling the penalty of Rs. 37,672 levied under section 271B of the Income Tax Act, 1961?" 2. The dispute relate....

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.... audit report and return within the prescribed time. The assessing officer rejected the explanation of the assessee and levied penalty for the failure of the assessee to furnish the return of income along with the audit report as prescribed under section 44AB within the time allowed under section 139(1) of the Act. The penalty order was cancelled by the Commissioner (Appeals) on the findings that ....

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.... 271B of the Act. It was also found that the penalty proceedings were initiated during the course of assessment proceedings and the contrary observation by the Commissioner (Appeals) was incorrect. However, the Tribunal sustained the deletion of penalty on the ground that the audit report was obtained within the time allowed under section 139(1) of the Act and, therefore, no penalty can be levied ....