Income Tax Appellate Tribunal - Agra
Pradeep Agarwal vs Income Tax Officer on 24 June, 2004
Equivalent citations: (2005)94TTJ(AGRA)166
ORDER
I.S. Verma, J.M.
1. In this appeal, the assessee has objected to the order dt. 30th March, 1991, of CIT(A), whereby he has confirmed the levy of penalty under Section 271B of the IT Act.
2. I have heard the learned counsel of the assessee as well as the learned Departmental Representative.
3. The facts relating to the issue involved in this appeal and as have been revealed from the record, are that the assessee had furnished his return of income for the asst. yr. 1997-98 along with report of audit in Form No. 3CD on 29th Oct., 1997. The return so furnished was not accompanied by audit trading account, P&L a/c and balance sheet. The AO considered the audit report in Form No. 3CD which was not accompanied by audited trading account, P&L a/c and balance sheet, as incomplete and illegal, and consequently proceedings to impose penalty under Section 271B of the Act were initiated.
4. The assessee's plea before the AO was that the provisions of Section 44AB do not require the furnishing of so-called audited balance sheet, trading account and P&L a/c. The only requirement of the assessee was to furnish audit report, which as per provisions of Section 139 was to be furnished in Form No. 3CD and the assessee has furnished the same along with the return well in time. Therefore, there was no default for levy of penalty. Another plea was that absence of balance sheet, P&L a/c and trading account may have rendered the return defective, but the AO having not issued a notice under Section 139(9) of the Act, penalty in question could not be imposed. The audited trading account, balance sheet and P&L a/c however were furnished during the course of assessment proceedings.
4.1 The AO rejected assessee's all the pleas and imposed penalty as per order dt. 22nd Sept., 2000, which is absolutely silent with regard to the prior approval of the authorities as required under law.
4.2 The assessee went in appeal before the CIT(A) and reiterated the submissions made before the AO, but failed. It was in the light of above facts and circumstances that the learned counsel for the assessee reiterated the submissions made before the authorities below.
5. The learned Departmental Representative supported the order of the AO.
6. After careful consideration of the rival submissions, facts and circumstances of the case and the requirement of the provisions of Section 44AB, 139(9) and Section 271B of the Act, I am inclined to agree with the submissions of the learned counsel for assessee that the assessee having procured the report of audit and having furnished the same (in Form No. 3CD) well in time, i.e., 29th Oct., 1997, along with the return under Section 139(1), there was no violation of Section 44AB of the Act. I am further inclined to agree with the submissions of the learned counsel for the assessee that failure to furnish the audited balance sheet, trading account and P&L a/c would not render the report of audit as incomplete or illegal. Non-furnishing of such documents, in my opinion, could render the return of income as defective for which the AO was bound to give an opportunity to the assessee. In the present case, it is an admitted fact that audited documents under reference were furnished during the course of assessment proceedings, which goes to show that the assessee had complied with the requirement of Section 139(9) also. In any case, I am of the opinion that the assessee had furnished the audit report in Form No. 3CD along with return well in time which does not attract the provisions of Section 271B of the Act. The Revenue authorities, in my opinion, were not justified in proceeding to impose penalty for a default not committed by the assessee.
7. In view of the totality of facts and circumstances of the case, the penalty imposed under Section 271B is cancelled. The order of the CIT(A) is set aside.
8. In the result, the appeal of the assessee is allowed.