CIT JALANDHAR vs. M/S JALANDHAR SALES CORP.JALDN

ITR/62/1999HC Punjab & HaryanaPHHC01038750199923 October 2006Author: MR. JUSTICE RAJESH BINDAL,MR. JUSTICE ADARSH KUMAR GOEL2 pages
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What did the High Court hold?

The High Court held that the Tribunal was right in cancelling the penalty levied under section 271B of the Income Tax Act, 1961. The Court referred to its own earlier judgment dated 5.9.2006 in ITR No.220 of 1995, which followed the High Court's decision in Income Tax Officer v. Kaysons India, (2000) 246 ITR 489. The principle established is that if the audit report is filed late, but the delay is not substantial or attributable to wilful neglect, and the assessee has otherwise complied with the provisions, the penalty under section 271B may not be warranted. The question of law was answered against the revenue and in favour of the assessee. The reference was disposed of accordingly.

What were the facts?

The assessee, M/s. Jalandhar Sales Corporation, filed its return for assessment year 1990-91. The audit report under section 44AB of the Income Tax Act, 1961, was filed on 21.12.1990, although the accounts were audited on 24.11.1990. The revenue initiated penalty proceedings under section 271B of the Act. The Income Tax Appellate Tribunal, Amritsar Bench, cancelled the penalty levied. The Commissioner of Income Tax, Jalandhar, being aggrieved, referred a question of law to the High Court of Punjab and Haryana at Chandigarh.

What were the issues?

1. Whether, on the facts and circumstances of the case, the Tribunal was right in cancelling the penalty levied under section 271B of the Income Tax Act, 1961? The revenue contended that the penalty under section 271B was leviable. The judgment does not record specific arguments made by the revenue beyond the reference of the question of law. The assessee's position, as reflected in the Tribunal's decision, was that the penalty was not called for. The Tribunal relied on its earlier judgment in ACIT v. M/s. Neel Kamal Rubber Industries, Jalandhar, ITA Nos.400 and 401(ASR)/1992, decided on 17.11.1992.

Which sections of the Income-tax Act were involved?

Section 44AB,Section 271B

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
ITR No.62 of 1999 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITR No.62 of 1999 Date of decision:23.10.2006 The Commissioner of Income tax, Jalandhar ....Petitioner versus M/s. Jalandhar Sales Corporation, Nakodar Road, 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.

JUDGMENT: 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 20.7.1998 in ITA No.705(ASR)/1992, in respect of assessment year 1990-91:- “Whether on the facts and circumstances of the case, the Tribunal was right in cancelling the penalty levied under section 271B of the Income Tax Act, 1961?”

In the year 1990-91, the assessee filed its return and audit report under section 44AB of the Income Tax Act, 1961 (for short, 'the Act') was filed on 21.12.1990, though, accounts had been audited on 24.11.1990.

Following its earlier judgment in ACIT v. M/s. Neel Kamal Rubber Industries, Jalandhar, ITA Nos.400 and 401(ASR)/1992, decided on 17.11.1992, it was held that p

The order continues below.

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