- (1.) ON an application under s. 256(1) of the IT Act, 1961, Tribunal has referred the following questions for the opinion of this Court : "(i) Whether, on the facts and in the circumstances of the case, the Tribunal is justified in law in cancelling the penalties under s. 271B of the IT Act levying Rs. 29,352, Rs. 29,709 and Rs. 48,163 for the asst. yrs. 1985 -86, 1986 -87 and 1987 -88 respectively. (ii) Whether, on the facts and in the circumstances of the case, the Tribunal is justified in law in observing and holding that it is impossible to file the audit report within the time stipulated under s. 271B because the specified date of getting the audit report is the same as the due date of filing the return under s. 139(1) of the Act, and making the said observation the basis for cancelling of the penalties -
(2.) THE assessee's turnover exceeds the amount stipulated under s. 44AB of the Act, 1961 in the asst. yrs. 1985 -86, 1986 -87 and 1987 -88. The assessee failed to get the audited report in terms of s. 44AB within the specified time. Therefore, the AO initiated the penalty under s. 44AB of the Act for aforesaid years and imposed the penalty for all these
(3.) YEARS . In appeal before the CIT(A). CIT(A) gave reason that penalty under s. 44AB is not automatic and that the accountant of the assessee was ill and ultimately expired in 1988, he cancelled the penalty levied by the AO. In appeal before the Tribunal, Tribunal though confirmed the order of CIT(A) but on the ground that it is not possible to file the audited report as required under s. 44AB. 3. Heard learned counsel for the parties. Learned counsel for the Revenue submits that no evidence was produced before the AO for illness of the accountant. He further submits that reason given by the Tribunal for cancelling the penalty is also erroneous. Learned counsel for the assessee submits that the accountant was ill since 1982 and expired in 1995 (1988). He words "furnished by" for the words "obtained before". He submits that before amendment the furnishing of the audited report was not required. Therefore, if assessee does not furnish the report along with the return under s. 139 penalty cannot be imposed. He placed reliance on the decision of Allahabad High Court in case of CIT vs. Jai Durga Construction Co. (2000) 164 CTR (All) 512 : (2000) 245 ITR 857 (All).;