Income Tax Appellate Tribunal - Lucknow
Assistant Commissioner Of Income Tax vs Vaish Bros. And Co. Ltd. on 12 July, 2004
Equivalent citations: (2005)93TTJ(LUCK)476
ORDER
Keshaw Prasad, A.M.
1. Both the appeals have been directed by the Revenue against the order of the learned CIT(A) dt. 31st Dec, 2002, cancelling the penalty under Section 271B of the Act pertaining to asst. yrs. 1987-88 and 1989-90. We will first take up the appeal for asst. yr. 1987-88.
2. Briefly, the facts of the case are that the assessee is a private limited company which is required to get its accounts audited under the Companies Act. The report on such audit was to be filed along with the return of income filed by the assessee. The due date for furnishing the return of income was 31st Dec, 1987. The audit of the assessee was completed on 4th Jan., 1988. Thus, there was a delay of four days. However, the return of income along with the audit report was filed on 25th April, 1988. The penalty proceedings under Section 271B of the Act were initiated in 1992. However, the penalty was imposed in the year 2001. The imposition of penalty was challenged before the learned CIT(A), who cancelled the same by observing that the penalty has been imposed beyond the limitation period mentioned in Section 275 of the Act. The above finding of the learned CIT(A) has been challenged before us.
3. As regards the asst. yr. 1989-90, we find that the return of income was due on 31st Dec, 1989. The audit report was obtained on 10th Aug., 1990. A show cause notice was issued on 14th Feb., 1992, as to why penalty under Section 271B may not be imposed. However, the order imposing penalty has been passed in 2001 which was challenged before the learned CIT(A). The learned CIT(A) cancelled the imposition of penalty on the ground that the order has been passed beyond the limitation period. This finding of the learned CIT(A) has been challenged before us.
4. While the learned Departmental Representative supported the order of the AO, the learned counsel supported the order of the learned CIT(A).
5. We have considered the rival submissions. It is admitted fact that the show-cause notice for asst. yrs. 1987-88 and 1989-90 was first issued on 14th Feb., 1992. As the penalty proceedings in both the years were initiated after 31st March, 1989, the provisions of Section 275 of the Act as amended by Direct Tax Laws (Amendment) Act, 1987, shall apply for the purposes of calculating limitation period. Admittedly, the penalty under Section 271B was not relatable to the income computed. Therefore, under the provisions of Section 275(l)(c) of the Act, the penalty order should have been passed within six months from the end of the month in which the action for imposition of penalty is initiated. In the instant case, the action for imposition of penalty was initiated in February, 1992. Thus, the penalty order should have been passed within six months from 29th Feb., 1992. As the penalty has been imposed in 2001, the same was beyond the limitation period. The learned CIT(A) appreciated these facts and cancelled the penalty. We do not find any infirmity in his order and while upholding the same, we dismiss the ground of appeal raised by the Revenue.
6. In the result, both the appeals directed by the Revenue are dismissed.