- (1.) Heard the learned Counsel for the appellant, Sri D.D. Chopra, and Ms. Pushpila Bisht for the assessee.
(2.) This appeal under Section 260A of the IT Act, 1961, has been filed by the appellant on the following questions of law : "(1) Whether an assessee can be treated as having discharged the obligation placed upon it as per provisions of Section 44AB of the IT Act, 1961, only by submitting provisional accounts on the ground that its accounts for the preceding year were still to be finalized ? (2) Whether, on the facts and in the circumstances of the case, the learned Tribunal was justified in law in reversing the CIT(A)'s findings and in cancelling levy of penalty of Rs. one lakh under Section 271B of the IT Act, 1961, for the asst. yr. 1990-91 ?"
(3.) The assessment year, which is involved in the appeal, is the asst. yr. 1990-91. The assessee co-operative society has been constituted for safeguarding the interest of the cane growers and member unions. The activities of the assessee-society included printing and supply of the forms, registers and stationery, etc. for which it was maintaining Tress Account'. The assessee's main function was to provide credit facilities to its members. It did not deal in sale of goods. The activities of the society were spread over the whole of the State. The assessee filed the return on 30th Nov., 1990 declaring an income of Rs. 86,83,906 for the asst. yr. 1990-91. The gross turnover of the assessee was Rs. 6,38,00,000, as such, in view of the provisions contained in Section 44AB of the IT Act, the assessee was required to obtain the audit report before the specified date and to furnish it along with the return, before the specified date, but the assessee in this case failed to obtain the said report resulting in levy of penalty of Rs. one lakh under Section 271B of the Act by the assessing authority. The penalty imposed was affirmed in appeal by the appellate authority but in the second appeal preferred before the Tribunal, the Tribunal disagreeing with the findings recorded by the assessing authority as well as by the appellate authority allowed the appeal and set aside the penalty imposed under Section 271B.;