Madras High Court
The Commissioner Of Income Tax vs M/S.Apex Laboratories (P) Ltd on 24 January, 2006
Author: P.P.S.Janarthana Raja
Bench: P.D.Dinakaran, P.P.S.Janarthana Raja
?IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 24/01/2006
Coram :
THE HON'BLE MR.JUSTICE P.D.DINAKARAN
AND
THE HON'BLE MR.JUSTICE P.P.S.JANARTHANA RAJA
Tax Case (Appeal) No.1565 of 2005
The Commissioner of Income Tax,
Chennai. ..Appellant
-Vs-
M/s.Apex Laboratories (P) Ltd.,
76, C.R. Ramaswamy Road,
Chennai-600 018. ..Respondent
Appeal under Section 260-A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Madra
!For Appellant : Mrs.Pushya Sitaraman
^For Respondent : ---
:JUDGMENT
(Judgment of the Court was delivered by P.P.S.Janarthana Raja, J.) The present appeal is filed under Section 260-A of the Income Tax Act, 1961 by the Revenue, in I.T.A. Nos.879/Mds/99 dated 10.02.2005, passed by the Income Tax Appellate Tribunal, Madras "A" Bench raising the following substantial questions of law.
"1. Whether in the facts and circumstances of the case, the Tribunal was right in holding that no penalty is imposable under B for non compliance with the provisions of Sec.44AB on the ground that the returns were filed belatedly neither under Section 139 nor on a notice under Section 142?
2. Whether on the facts and circumstances of the case, the Tribunal was right in deleting the penalty without giving a finding of fact as to whether the tax audit report had been obtained withi prescribed time by the assessee?"
2. The facts leading to the above questions of law are as under:
The relevant assessment year is 1993-94. The assessee filed its return of income on 13.03.1997 along with the Audit Report under Section 44AB. As the return was a belated one and there was no income assessable for the assessment year under consideration, the same was treated as invalid. However, it was noticed that the Audit Report in Form No.3CD was not furnished to the Department on or before the due date, namely, 31.12.1994, as specified in the Act under Section 44AB. A show cause notice under Section 271B was issued to the assessee calling for explanation as to why penalty under Section 271B should not be levied for the assessee's failure to furnish the report of audit before the due date, as provided under Section 44AB of the Income Tax Act. The assessee, by his reply has stated that no penalty is contemplated in the Act for the assessees who have got the audit completed, and furnished the report of such audit and furthe delay in getting the accounts audited or in submission of audit does not attract penalty under Section 271B. The Assessing Officer rejected the contention and held that it was a clear violation of provision under Section 44AB and penalty under Section 271B this case, and levied a penalty of Rs.1,00,000/- under Section 271B of the Act. Aggrieved by the order, the respondent filed an appeal before the Commissioner of Income Tax (Appeals) and held that no penalty was imposable under Section 271B as the Section envisaged levy of penalty for failure to get accounts audited, obtain a report and furnish the report along with the return filed under Sectio response to a notice under Section 142(1). Since in this case, the report was filed under neither section, the question of specific date does not arise. The Commissioner of Income Tax allowed the appeal. The Revenue took up the matter to the Income Tax App Tribunal. The Tribunal held that it is sufficient if the audit report was obtained in time and the delay in filing the same would not lead to imposition of penalty, and dismissed the appeal.
3. We heard the learned standing counsel appearing for the Revenue, who submitted that there cannot be a situati his appeal on time, but does not file his audit report on time, should be in a worse situation than a person who files both belatedly. She further submitted that the Tribunal ought to have given a finding of the fact as to when the audit report was signed, and thereafter decide the issue on whether the audit report had been obtained within the time prescribed by the statute. In this case, the due date for return was 31.12.1993. The assessee filed his return belatedly on 31.0 3.1997. It may be seen that the return was not filed within the time limit stipulated under Section 139(1). The return for the assessment year 1993-94 was time barred by 31.03.1995 and the Assessing Officer did not issue any notice under Section 142(1) calling for furnishing of the return for the said year and so, the return could not be taken as filed in response to notice under Section 142 also. Since Section 271B envisage levy of penalty for failure to get his accounts audited, obtain a report of such audit and furnish the said report along with his return of income filed under Section 139(1) or in response to notice under Section 142(1), the submission that iled under Section 139(1) or response to notice under Section 142(1)(i). Hence, when the return was not filed under the provision of law, no default could be made out under Section 44AB. In this case, the penalty is leviable only if the assessee fails to get his accounts audited and obtain a report. In this case, the accounts were audited and also the the Audit Report, but the same was filed along with the return which was filed belatedly. Hence, penalty cannot be imposed under Section 27 1B of the Act.
4. In the foregoing conclusions, we find no error in the order of the Tribunal and hence no substantial questions of law arise for consideration of this Court. Hence, we dismiss the above tax case. No costs.
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