CIT PATIALA vs. M/S PIONEER SERVICE STATION RO

PDF · subscribers
ITR/36/1999HC Punjab & HaryanaPHHC01038717199910 November 2006Author: MR. JUSTICE RAJESH BINDAL,MR. JUSTICE AJAY KUMAR MITTAL2 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that the Tribunal was right in law in upholding the order of the CIT(A) cancelling the penalty imposed under Section 271B. The Court relied on its own judgment in Income Tax Officer v. Kaysons India, (2000) 246 ITR 489. The Court observed that the default or failure to file the return along with the audit report on or before the specified date is not hit by Section 271B. It was not disputed that the assessee had failed to get the accounts audited or obtain the report in terms of Section 44AB before the specified date. The Court noted that no return had been filed under Section 139(1) or in response to a notice under Section 142(1). The assessee had filed a return under Section 139(4) on December 31, 1990, which was accompanied by the audit report obtained in accordance with Section 44AB. Therefore, the default for which the penalty was levied was not covered by Section 271B, and the CIT(A) and the Tribunal were justified in holding that no penalty was leviable. The question of law was answered against the revenue and in favour of the assessee.

What were the facts?

The Commissioner of Income-tax, Patiala (Revenue) has filed a reference application before the High Court of Punjab and Haryana at Chandigarh against an order dated 4.8.1997 passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench. The ITAT's order was in appeal No. 143 & C.O.No.24/Chandi/95 concerning assessment year 1992-93. The dispute pertains to a penalty imposed by the Assessing Officer (AO) under Section 271B of the Income Tax Act, 1961. The assessee, M/s Pioneer Service Station, Ropar, had obtained an audit report under Section 44AB on or before the specified date and filed it along with a belated return under Section 139(4). The penalty was challenged on the grounds that no notice under Section 142(1) was issued to file the return.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in upholding the order of the CIT(A) cancelling the penalty imposed on the assessee by the AO u/s 271B on the ground that this was not exigible in a case where audit report u/s 44AB had been obtained on or before the specified date and the same was filed alongwith the return u/s 139(4) and there being no notice issued u/s 142(1) to file the return of income? Assessee's Contention: The assessee argued that the penalty under Section 271B was not leviable because the audit report under Section 44AB was obtained on or before the specified date and was filed along with the return under Section 139(4). Furthermore, no notice under Section 142(1) was issued to the assessee to file the return of income. Revenue's Contention: The revenue contended that the penalty was exigible under Section 271B.

Which sections of the Income-tax Act were involved?

Section 271B,Section 44AB,Section 139(4),Section 142(1)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH **** I.T.R. No.36 of 1999 Date of Decision:10.11.2006 Commissioner of Income-tax, Patiala .....Petitioner Vs. M/s Pioneer Service Station, Ropar .....Respondent CORAM:- HON'BLE MR. JUSTICE AJAY KUMAR MITTAL HON'BLE MR. JUSTICE RAJESH BINDAL Present:- Dr. N.L.Sharda, Advocate for the revenue. ****

JUDGMENT Following question of law has been referred for opinion of this Court by the Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh arising out of its order dated 4.8.1997 in I.T.A. No.143 & C.O.No.24/Chandi/95 in respect of assessment year 1992-93:- “ Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in upholding the order of the CIT(A) cancelling the penalty imposed on the assessee by the AO u/s 271B on the ground that this was not exigible in a case where audit report u/s 44AB had been obtained on or before the specified date and the same was filed alongwith the return u/s 139(4) and there being no notice issued u/s 142(1) to file the return of income?” We find that the issue stands covered against the revenue by the judgment of this Court in Income Tax Officer v. Kaysons India, (2000) 246 ITR 489. After considering the relevant provisions, this Court observed at page 492:- “It is, therefore, evident that the default or failure to file the I.T.R. No.85 of 1987 -2- return along with the audit report on or before the specified date is not hit by the provisions of section 271B. It is not the case of the Revenue that the assessee has failed to get the accounts audited or has failed to obtain the report of such audit in terms of section 44AB before the specified date. It is also evident that no return had been filed either under sub-section (1) of section 139 or in response to any notice under clause (i) of sub-section (1) of section 142 and as such there could possibly be no default of not furnishing the audit report along with such a non-existent return. The return under sub-section (1) of section 139 in this case could be filed up to November 30, 1990. However, the assessee had filed the return on December 31, 1990, which was a return filed under sub-section (4) of section 139 and this return was duly accompanied by the audit report obtained by the assessee in accordance with the provisions of section 44AB. Thus, according to us, the default for which penalty had been levied was not covered by the provisions of section 271B and the Commissioner of Income- tax (Appeals) and the Tribunal were justified in holding that no penalty was leviable.” Accordingly, the question is answered against the revenue and in favour of the assessee.

( AJAY KUMAR MITTAL ) JUDGE November 10, 2006 ( RAJESH BINDAL ) renu JUDGE

More judgments on Section 271B

All 1,993 judgments and leading authorities on Section 271B →

Recent GST High Court judgments

Search GST case law →