Rajasthan High Court - Jaipur
Commissioner Of Income Tax vs Khubi Ram Om Prakash on 14 July, 2004
Equivalent citations: (2004)190CTR(RAJ)126, [2005]275ITR131(RAJ)
Author: Prakash Tatia
Bench: Prakash Tatia
JUDGMENT
1. Heard learned counsel for the appellant.
2. These two appeals were admitted in terms of following questions :
"1. Whether, in the facts and circumstances of the case, the Tribunal had erred in cancelling the penalty imposed under Section 271B?
2. Whether, in the facts and circumstances of the case, the Tribunal was right in law when it was proved that the assessee was provided photocopies of the documents by the Department which was sufficient for compliance of the provisions of Section 44AB?"
3. Since common issues are involved in both the appeals, we have heard learned counsel for the appellant and dispose of these appeals by this common order.
4. Considering the business turnover of the assessee-respondent, the assessee-respondent was under obligation to comply with the provisions of Section 44AB of the Act and get all its accounts audited and was required to submit audit report in the prescribed form, along with the returns. That has not been done, therefore, the penalty was initiated under Section 271B of the Act.
5. The case of the assessee was that there was a survey and his books for the asst. yrs. 1989-90 and 1990-91 were impounded on 29th Jan., 1991, therefore, it could not get the accounts audited and submitting the report was beyond its control. The AO did not accept this explanation. He found from the record that as requested by the assessee, the requisite copies of documents needed for completing the accounts and for closing the accounts were supplied to the assessee on 28th June, 1991 and they were available with him as the photocopies of those documents were supplied on 28th June, 1991. The AO has imposed the penalty under Section 271B of the Act in all the four years, i.e., 1989-90, 1990-91, 1991-92 and 1992-93. The appeal was filed for the asst. yrs. 1991-92 and 1992-93. For the reasons given by the AO, CIT(A) has also sustained the penalty vide his order dt. 15th Dec., 1993. The Tribunal has considered the penalty and concluded its decision in paras 12 and 13.
6. In spite of the service, none appeared for the assessee. Heard learned counsel for the Department. Mr. Bissa submits that when the required photocopies of the relevant documents were supplied to the assessee by the Department on 28th June, 1991, there was no justification for not completing and getting it audited before due dates.
7. While cancelling the penalty, the Tribunal has considered the fact at para 12, which reads as under :
"The facts of the assessee's case for asst. yrs, 1991-92 and 1992-93, however, are slightly different from asst. yrs. 1989-90 and 1990-91 inasmuch as the incomplete books of accounts of the assessee-firm for asst. yrs. 1989-90 and 1990-91 were impounded by the AO on 29th Jan., 1991 during survey carried out under Section 133A and in the absence of closing balances of the earlier year to be brought forward as opening balance of the subsequent years relevant to asst. yrs. 1991-92 and 1992-93, the assessee was not in a position to complete the books of accounts of the said years as also to get the same audited by a chartered accountant as required under Section 44AB. In this regard it is worthwhile to mention that the books of accounts of the assessee for asst. yrs. 1989-90 and 1990-91 were finally released by the Department only in the month of December, 1992, that is, only after the due date prescribed for getting the books of accounts audited under Section 44AB being 31st Oct., 1991 and 31st Oct., 1992 for asst. yrs. 1991-92 and 1992-93, respectively. This being the factual position, we are of the view that the assessee could not get its accounts audited and obtain the report of such audit for asst. yrs. 1991-92 and 1992-93 before the specified date due to circumstances beyond its control and, therefore, there was a reasonable cause for assessee's failure in complying with the requirements of Section 44AB. The decision of Hon'ble High Court of Gujarat in the case of CIT v. Tea King (2000) 155 Taxation 25 (Guj) cited by the learned counsel for the assessee also supports this view."
8. When the facts are not in dispute that survey was conducted on 29th Jan., 1991 and books for asst. yrs. 1989-90 and 1990-91 were impounded, but on the request of assessee, photocopies of relevant documents of the asst. yrs. 1989-90 and 1990-91 were supplied to the assessee on 28th June, 1991.
9. This fact has not been disputed by the assessee nor the Tribunal has considered this aspect, when the relevant photocopies of the relevant documents were available for closing of the accounts for the asst. yrs. 1989-90 and 1990-91, there was no justification for not completing the accounts for the asst. yrs. 1991-92 and 1992-93 and get them audited on due dates. No other reason has been given by the assessee for not completing the accounts and get it audited, as required under Section 44AB of the Act. Thus, in our opinion, the Tribunal has committed error in cancelling the penalty.
10. In the result, the order passed by the Tribunal is set aside and the order of AO as well as the CIT(A) regarding imposing of penalty under Section 271B of the IT Act is restored.
Consequently, both the appeals filed by the appellant are allowed.