Jawahar Lal Gupta, J. - (1.) THE assessee derives its income from business. Its premises were surveyed on November 24, 1992. On November 27, 1992, the assessee was given a notice under Section 271B of the Income-tax Act, 1961. THE assessee filed a reply on January 4, 1993. After recording the evidence, the assessing authority levied a penalty of Rs. 99,568. THE assessee filed an appeal. It was accepted by the Commissioner vide order dated October 26, 1993. Aggrieved by the order, the Revenue filed an appeal. THE Tribunal having reversed the order of the Commissioner, the assessee has filed this appeal under Section 260A of the Act.
(2.) MR. A. K. Mittal, learned counsel for the appellant, contends that the audit report was ready on October 30, 1992. The managing partner of the assessee-firm was sick. Thus, the report could riot be collected and produced before the officer at the time of survey. Learned counsel has further pointed out that an affidavit had been filed by the managing partner indicating that he was not well and that the audit report had been prepared by the chartered accountant in October, 1992. Admittedly, the assessee's premises were surveyed on November 24,1992. His statement was recorded. The relevant portion has been reproduced in the order of the Assistant Commissioner of Income-tax, a copy of which has been produced as annexure P-l. It reads as under : "Question : Where is the audit report ? Answer : The report is not lying with me. It is with Shri Jasbir Singh, chartered accountant. Question : Should we go to the office of Sh. Jasbir Singh, chartered accountant, and collect the report in your presence ? Answer : I know that report is not yet ready by this time and it is yet to be prepared."
(3.) A perusal of the above extract from the statement clearly shows that Mr. Rajinder Kumar Arora, the managing partner, did not have the report on November 24, 1992, with him. Still further, when the surveying officer had offered to go to the office of Mr. Jasbir Singh, the chartered accountant, to collect the report, the partner had stated that he knew that the "report is not ready." Thus, it is clear that till November 24, 1992, the report had not even been prepared. It is, thus, clear that the assessee's claim that the audit report was ready by the due date is not correct. Thus, we are not surprised that the Tribunal had felt constrained to reverse the order passed by the Commissioner of Income-tax (Appeals).;