TaxTMI 
TaxTMI 
2014 (11) TMI 1285
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....osition of the penalty under S. 271B of the IT Act, 1961, despite the fact that the audit report was obtained under S. 44AB before the specified date and the same was filed along with return of income? 2. Whether non-communication of the fact of changed jurisdiction of the AO under S. 127 of the Act is sufficient not to impose the penalty in view of the overriding provisions contained in S. 273B of the Act?" 3. The DB IT Appeal No. 2 of 2007 was admitted vide order dt. 13th Feb., 2007 on the following substantial question of law: "Whether the learned Tribunal was justified in sustaining the imposition of the penalty under S. 271B for furnishing the audit report after the date specified under S. 44AB to the changed jurisdictional AO in the facts and circumstances where the audit report under S. 44AB had been obtained on or before the specified date and the same was filed along with return of income under S. 139(4) more so where the learned Chief CIT or the CIT undisputedly has failed to comply with the statutory mandate enshrined in S. 127 to communicate the facts of changed jurisdiction to appellant?" 4. The DB IT Appeal No. 5 of 2007 was admitted vide order....
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....ed accountant as required under S. 44AB of the IT Act, 1961. The due date of furnishing of the return of income under S. 139(1) of the IT Act so also the audited accounts, was on or before 31st Oct., 1997. Though it is alleged that the audit report was finalized on 6th Oct., 1997 and the same was sent it to its office at Bharatpur for submitting it with the return of income with the IT Department, Bharatpur, however, when presented, it was conveyed verbally that the jurisdiction over the case has been centralized with an officer at Jaipur but nothing more was conveyed and thus neither the return of income nor audit report was accepted and the return of income and audit report remained at assessee's office at Bharatpur and the assessee's office at Bharatpur had totally forgotten to submit return of income with the IT Department. However, on realizing the mistake and recollection, the return along with audit report was presented before the ITO, Bharatpur, who then accepted on 29th Jan., 1998. 8. The brief facts in the case of the appellant-assessee--M/s. Jaimal Ram & Party (DB IT Appeal No. 14 of 2007) are that it was being assessed to income tax by the AO, Bharatpur till ....
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....contended that there is no mistake on the part of the assessee and it was presented on or before the due date and since the audit report was prepared on 8th Oct., 1997, there was no reason to withhold and therefore, no penalty in law is leviable under S. 271B of the Act. 11. Insofar as the other two IT Appeals are concerned, it was contended that the auditor prepared audit report on 6th Oct., 1997 under S. 44AB in Form Nos. 3CB and 3CD but it is claimed that immediately after preparation of the audit on 6th Oct., 1997, the same along with return of income, was presented before the AO, Bharatpur, but neither the return of income nor audit report was accepted and it was verbally conveyed that the jurisdiction over the case stood transferred to the Dy. CIT, Central Circle-2, Jaipur, which was not intimated and therefore, no penalty in law is leviable under S. 27 IB of the Act. 12. However, the AO was not satisfied with the explanation furnished and came to the conclusion that the assessee was well aware of the cases having been centralized in August, 1997. i.e. much before the due date of filing of the return. The AO was also of the view that the explanation appears to be an aft....
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....maining two cases was 6th Oct., 1997 and though the audit report as well as return of income were all prepared on or before the due date, however, same were said to be presented before the AO at Bharatpur but since it having not been accepted and returned to the representative of the assessee without informing the correct jurisdiction, therefore, there is a reasonable cause insofar as penalty is concerned. He contended that as far as the assessee is concerned, he had no other option except to get the accounts audited in time and in presenting before the AO where it was being filed earlier. He contended that under S. 271B it is not incumbent upon the AO to impose penalty as the word used is "may" and it is discretion of the AO, or. a reasonable cause pleaded, not to impose penalty. He contended that reasonable cause do exists and the Tribunal wrongly sustained the penalty. He contended that no prejudice has been caused to the Revenue, even if the audit report has been filed late or the return was filed late as the assessment was completed after sufficient long time. He relied upon judgments, rendered in the cases of Rajasthan Co-operative Dairy Federation Ltd. v. Dy. CIT (2002) 176 ....
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....se may be, and he has claimed his income to be lower than the profits or gains so deemed to be the profits and gains of his business, as the case may be, in any previous year, get his accounts of such previous year audited by an accountant before the specified date and furnish by that date the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed: Provided that this section shall not apply to the person, who derives income of the nature referred to in S. 44B or S. 44BB or S. 44BBA or S. 44BBB, on and from the 1st April, 1985 or, as the case may be, the date on which the relevant section came into force, whichever is later: Provided further that in a case where such person is required by or under any other law to get his accounts audited, it shall be sufficient compliance with the provisions of this section if such person gets the accounts of such business or profession audited under such law before the specified date and furnishes by that date the report of the audit as required under such other law and a further report (by an accountant) in the form prescribed under this sec....
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....also mandates that if the report of such audit, as required under S. 44AB, has not been filed on or before the due date, the AO could levy penalty Under S. 271B of the Act. However, S. 273B prescribes that in case there is reasonable cause for the said failure, penalty need not be imposed and S. 271B forms part of S. 273B. 20. It would be appropriate to deal with the submission of the counsel that the AO at Bharatpur on account of change of jurisdiction did not accept the return of income or the audit report when presented immediately after completion of the audit of accounts as well as return of income but what was contended, no tangible evidence or material either in the shape of an affidavit or otherwise of the person who claimed that he had presented the return of income along with audit report before the AO at Bharatpur was placed or refusal by the officer at Bharatpur. In our view, mere justification as alleged without any supporting evidence, is no explanation and the Tribunal had rightly rejected the same. 21. Though It may not be relevant but from the narration of facts, it can be inferred that the audit report, which has been annexed by counsel for the assessee, on ....