PRAKASH KRISHNA, RAM SURAT RAM (MAURYA), JJ. - (1.) THESE three appeals have been filed under section 260A of the Income Tax Act against a common judgment and order dated 17th of August, 1999 passed by the Income Tax Appellate Tribunal in Income Tax Appeal No.2558 (Del) of 1995, Income Tax Appeal No.2559 (Del) of 1995, and Income Tax Appeal No.2560 (Del) of 1995. These appeals relate to the Assessment Years 1989 -90, 1991 -92 and 1992 -93 arising out of penalty proceedings under section 271 -B of the Income -tax Act.
(2.) THE assessee is a private limited company. Its accounting period has ended on 31st of March, 1989, 31st of March, 1991 and 31st of March, 1992 respectively. Indisputably, the assessee was required to file an audit report as required under section 44AB of the Income Tax Act along with its return of income. The assessee did file the audit report along with the income tax return within the statutory period of time but the audit report was unsigned and unverified. The Assessing Officer accepted the return but initiated the penalty proceedings under section 271 -B of the Act on the ground that the audit report is no audit report being unsigned and unverified. In response to the notice, the assessee filed a certificate issued by its auditor as also signed audit report. However, penalty was imposed by the Assessing Officer and the matter was carried unsuccessfully in appeal. But in second appeal before the Income Tax Appellate Tribunal the appeals filed by the assessee having been allowed, the present appeals have been preferred by the department. In the memo of appeals the following questions of law have been raised: - 1. Whether on the facts and in the circumstances of the case, the Ld. ITAT was legally correct in holding that the A.O. could have given opportunity to the assessee to correct the error as per requirement of the proviso (BB) to sec. 139(9) of the I.T. Act, whereas assessee filed audit report with the return unsigned and unverified by the C.A. and whether A.O. can call for concerned C.A. u/s 139(9) to sign and verify the audit report? 2. Whether, on the facts and in the circumstances of the case, the Ld. ITAT was legally justified in cancelling the penalty u/s 271 B of Rs.100,000/ - whereas an audit report which is not signed and verified by the Chartered Accountant cannot be considered a valid report in view of Sec. 44 AB?"
(3.) HEARD Sri Shambhu Chopra, learned counsel for the appellant and Sri Ashish Bansal holding brief of Sri S.K. Garg, Advocate for the respondents.;