M.V.R. Prasad, A.M. - (1.) THESE three appeals are directed against the consolidated order of the CIT(A), dated 29th April, 1991, for the asst. yrs. 1986-87 to 1988-89 wherein he confirmed the penalties levied under s. 271B of Rs. 1,00,000 each for these three assessment years.
(2.) The common ground taken in all these appeals is that the CIT(A) erred in confirming the levy of penalty under s. 271B by the AO for each of the three years involved. The turnover of the assessee-company was about Rs. 10 crores each for the asst. yrs. 1986-87 and 1987-88 and about Rs. 13.5 crores for the asst. yr. 1988-89. As its turnover exceeded the limits stipulated under s. 44AB, it had to file the audit report as required under this section within the specified dates for each of the three assessment years involved. It, however, did not file the audit reports in the prescribed form within the specified dates. The relevant details for the three assessment years involved are as follows : JUDGEMENT_11432_TLIT0_19990.htm
(3.) IT may be observed that for the asst. yrs. 1987-88 and 1988-89, the returns were filed within the time extended by the AO for filing the return of income. For the asst. yr. 1986-87, there was only a slight delay in the filing of the return after the extended date. There is, however, considerable delay in obtaining the tax audit report for each of the three years, as all the reports were obtained only on 18th January, 1989. However, the reports were filed before the AO for each of the three years before the relevant assessment under s. 143(3) was made. In view of the considerable delays in the filing of the tax audit reports, the Revenue authorities levied the impugned penalties of Rs. 1 lakh for each of the three years involved, under the provisions of s. 271B. They had rejected the legal grounds taken by the assessee as well as the factual reasons made out as the explanation for the delay. The factual explanation given for the delay before the AO read as follows : "Our clients have various branches and have projects at various sites offices. In view of several accounts people involved in compiling tax audit details at each of the locations, there was a problem with regard to consistency in preparation of the particulars and at several locations, the details had to be compiled all over again. In the meantime, the staff at the head office which was involved in the job left the services of the company and new people had to work all over again and compile the required particulars.";