Gauhati High Court
Khuda Wood Products P. Ltd. vs Commissioner Of Income-Tax on 30 October, 2006
Equivalent citations: [2008]297ITR383(GAUHATI)
Bench: D. Biswas, U.B. Saha
JUDGMENT
1. Heard Mr. D.K. Mishra, learned senior counsel for the appellant and also Mr. U. Bhuyan, learned standing counsel for the Revenue.
This income-tax appeal was admitted for hearing on the following substantial questions of law:
(a) Whether, on the facts and in the circumstances of the case, the Tribunal ignoring the relevant materials, namely, auditor's letter dated June 5, 1991, before it was justified and did not err in holding that there was no reasonable cause for the delay in submitting the audit report by the assessee and this pass a perverse order?
(b) Whether, on the facts and in the circumstances of the case, the Tribunal interpreted the word 'reasonable cause' appearing in Section 273B under the Act contrary to the principle of interpretation of such words as has been laid down by the apex court in Surinder Singh Sibia v. Vijay Kumar Sood in Sarpanch Lonand Grampanchayat v. Ramgiri Gosavi and other various decisions?
2. As understood from the submission of learned Counsel for the parties, the dispute in a narrow compass is whether the certificate (annexure-A) issued by the auditor explaining the delay in auditing the accounts of the assessee (appellant) would in itself constitute reasonable cause within the meaning of Section 273B of the Income-tax Act.
3. There is no dispute that initially the income-tax return for the relevant assessment year was filed without audit report. Later on, audit report was filed on June 15, 1991, along with the revised return showing a loss by the appellant-firm. The assessment was completed on the revised return and thereafter, the notice under Section 271B was issued to the assessee (appellant) to show cause as to why penalty for non-submission of the audit report along with the return of income was not filed within the due date and as to why penalty would not be imposed for such default. After hearing the assessee, the Assessing Officer imposed a penalty of Rs. 1 lakh. The Commissioner of Income-tax (Appeals) allowed the appeal preferred by the assessee and set aside the order. On appeal by the Revenue, the learned Tribunal by the order dated April 25, 2003, reversed the finding of the Commissioner (Appeals) holding, inter alia, that the certificate issued by the auditor giving reasons for delay would not constitute reasonable ground within the meaning of Section 271B for the reason that there is no evidence on record to show that any effort was made by the assessee to get the accounts duly audited within the scheduled time.
4. According to Mr. Mishra, the certificate is suggestive of the fact that there is no lapse on the part of the assessee and the matter was pending with the auditor who could not undertake the job and finalize the matter within the scheduled time.
5. On the other hand, Mr. Bhuyan submitted Lhat the reasons given in the certificate issued by the auditor cannot be accepted as a reasonable cause as because this may have far reaching consequences in other future cases. It is of no consequence, unless the certificate is supported by any other evidence to show beyond all shadow of doubt that despite all efforts and sincerity, the assessee could not get his accounts audited within the time.
6. Mr. Bhuyan further pointed out that whether the delay was for sufficient reasons, is a matter of fact and the authorities below being final authority in the matter, the findings of the learned Tribunal in this matter may not be disturbed.
7. After considering the respective submissions of learned Counsel for the parties, we are of the view that proof relating to sufficient reasons is a matter of factual details and no question of law is involved in the matter. The reasons recorded by the learned Tribunal are, in our opinion, sufficient to hold that the assessee failed to discharge his burden. That apart, we are unable to discern any question of law in the matter. Consequently, we dismiss this appeal.