THE C.I.T.JDR. vs. M/S SHREE DURGA OIL MILLS.

PDF · subscribers
ITR/103/1995HC Punjab & HaryanaPHHC01032155199508 November 2006Author: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE RAJESH BINDAL2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the Tribunal was legally correct in dismissing the Department's appeal. The Court relied on its own previous judgment in Income-Tax Officer v. Kaysons India (2000) 246 ITR 489. The Court reasoned that Section 271B applies to a failure to get accounts audited or obtain an audit report in terms of Section 44AB before the specified date. In this case, the assessee had obtained the audit report in accordance with Section 44AB. Although the return under Section 139(1) was due by November 30, 1990, the assessee filed it on December 31, 1990, which was a belated return under Section 139(4). This belated return was duly accompanied by the audit report. The Court found that there was no default in furnishing the audit report along with a non-existent return, as the return filed was under Section 139(4). 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, Jalandhar (the Revenue) filed an Income Tax Reference (ITR) No. 103 of 1995 before the High Court of Punjab and Haryana at Chandigarh. The reference arose from an order dated 19.08.1994 passed by the Income Tax Appellate Tribunal (ITAT), Amritsar Bench, in I.T.A. No. 1310(ASR)/1992. The ITAT had dismissed the Revenue's appeal against an order of the Commissioner of Income-tax (Appeals) [CIT(A)] which had cancelled a penalty of Rs. 25,440. This penalty was imposed by the Assessing Officer (AO) under Section 271B of the Income Tax Act, 1961, for the assessment year 1990-91, due to the assessee's failure to file the audit report by the specified date under Section 139(1).

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal is legally correct in dismissing the Department’s appeal against the CIT(A)’s order cancelling the penalty of Rs. 25,440 imposed by the AO under section 271B of the Act for failure of the assessee to file the Audit Report on or before the specified date under section 139(1) of the I.T. Act, 1961? Assessee's Contention: The judgment does not record any specific contentions made by the assessee before the High Court. However, the reasoning of the High Court implies that the assessee argued that the penalty under Section 271B was not leviable in the given circumstances. Revenue's Contention: The Revenue, through the Commissioner of Income-tax, argued that the assessee had defaulted in filing the audit report by the specified date under Section 139(1), thereby attracting the penalty under Section 271B.

Which sections of the Income-tax Act were involved?

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

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.103 of 1995 Date of decision: 08.11.2006 The Commissioner of Income-tax, Jalandhar. -----Applicant Vs. M/s Shree Durga Oil Mills, Jalandhar. -----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON'BLE MR JUSTICE RAJESH BINDAL Present: Dr. N.L. Sharda, Advocate for the revenue. -----

ORDER: Following question of law has been referred for opinion of this Court by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar, arising out of its order dated 19.08.1994 in I.T.A. No.1310(ASR)/1992 in respect of assessment year 1990-91:- “Whether on the facts and in the circumstances of the case, the Tribunal is legally correct in dismissing the Department’s appeal against CIT(A)’s order cancelling the penalty of Rs.25440/- imposed by the AO under section 271B of the Act for failure of the assessee to file the Audit Report on or before the specified date under section 139 (1) of the I.T. Act, 1961?” 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 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

I.T.R. No.103 of 1995 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. ( ADARSH KUMAR GOEL ) JUDGE November 08, 2006 ( RAJESH BINDAL ) ashwani JUDGE Pag e

More judgments on Section 271B

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

Recent GST High Court judgments

Search GST case law →