DEVI PRASAD SINGH, S.C.CHAURASIA, J. - (1.) THE present appeal has been preferred only with regard to assessment year 1985-86. The Assessing Officer has imposed penalty under Section 271-B of the Income Tax Act on the ground that no effort was made prior to specified date i.e. 31st July, 1986 to obtain audit report. An appeal preferred against the order of Assessing Officer was allowed by CIT (Appeals) with the finding that the appellant made an effort for appointment of an auditor, but, same could not be appointed. Hence no penalty could be imposed. The appeal filed by the revenue authority has been allowed by Tribunal. The Tribunal has recorded a specific finding that the Assessee has not been able to show material which may indicate that before specified date i.e. 31st July 1986, any letter was written by the appellant to the authority for appointment of an auditor or for any step, which has been taken for audit of accounts. The Tribunal has gone through the records minutely and observed that the appellant has not been able to show any reasonable cause to avail the benefit of Section 271-B of the Income Tax Act. In the absence of reasonable cause, penalty imposed by the Assessing Officer under section 271-B of the Income Tax Act has been upheld.
(2.) LEARNED counsel for the appellant has submitted that CIT (Appeals) has recorded a finding that an effort was made by the appellant for appointment of an auditor. However, there appears no material on record which may indicate that some effort was made before the specified date for appointing the auditor. The question of law framed by the appellant as to whether the benefit of Section 271-B of the Income Tax Act, should have been to the appellant, seems to be well considered by the Tribunal. The finding of fact recorded by the Tribunal does not seem to suffer from any substantial illegality. While exercising jurisdiction under section 260-A of the Income Tax Act, an appeal may be admitted only on substantial questions of law, even if, there is minor error in the appreciation of evidence. In the absence of any substantial illegality, it is not open for this court to interfere under section 260-A of the Income Tax Act. While exercising jurisdiction under section 260-A of the Income Tax Act, it is not open for this court to re-appreciate evidence and material on record unless it is demonstrated that the finding recorded by the Tribunal is based on no evidence or it suffers from substantial illegality (77(1970) ITR 20 (SC) CIT Vs India Mica Supply Co. Pvt. Ltd. and 117(1979) ITR 568 (SC) CIT Vs Jardine Hendersan Ltd.
(3.) INSPITE of all efforts, learned counsel for the appellant has not been able to invite attention towards any document which may indicate that some effort was made by the appellant prior to specified date i.e. 31st July, 1986, to appoint an Auditor. Sub-Section 3 of Section 260-A of the Income Tax Act provides that an appeal may be admitted only in case, High Court is satisfied with regard to substantial question of law and thereafter, it shall formulate the question. The satisfaction must be based on material evidence on record and the appeal may be heard only on the question, so formulated. In the absence of any material indicating that an effort was made by the appellant prior to specified date with regard to appointment of an Auditor, benefit of Section 271-B of the Income Tax Act, is not liable to be extended.;