- (1.) THE appellant is aggrieved with the order dated 1.4.2008 (Annexure A -1) passed by the Income Tax Appellate Tribunal, Bench "B", Chandigarh(for brevity, 'the Tribunal'), vide which the order dated 14.11.2007 passed by the Commissioner of Income Tax(Appeals)(in short, 'CIT(A)'), deleting the penalty imposed by the Assessing Officer vide order dated 28.11.2006 under Section 271 -B of the Income Tax Act, 1961 (for short, 'the Act'), has been set aside.
(2.) THE instant appeal was admitted for determining the following substantial questions of law: - (i) Whether the Tribunal was justified in confirming the penalty u/s 271B treating the lapse of appellant as negligence though the CIT(A) accepted the same as reasonable cause ? (ii) Whether the Tribunal was justified in confirming the penalty u/s 271B though the same was imposed by the AO without regard to discretion given by Section 271B to AO wherein the word used is "may" and the provision of Section 273B further giving discretion to the AO not to levy the penalty in case of reasonable cause ? (iii) Whether the order of the Tribunal is perverse and against the provisions of law ?
(3.) ALL the substantial questions of law are inter -related and dependent upon each other. The factual aspect of the matter is not in dispute. It is own case of the appellant bank that its audit report under Section 44AB was completed on 20.10.2005. It filed its return on 24.01.2006, but without attaching the audit report, which was required to be filed upto 31st October, 2005. The audit report was subsequently filed on 19.6.2006 when the Assessing Officer issued notice dated 17.05.2006 for levying penalty under Section 271B of the Act. The explanation rendered by the appellant bank was not accepted by the Assessing Officer and penalty @ 0.5% of gross turnover i.e. Rs. 60,254/ - was imposed. The CIT(A) deleted the penalty, but as noticed above, the Tribunal restored the order of Assessing Officer. The contention of the appellant bank is that imposition of penalty for non -compliance with the provisions contained in Section 44AB is not mandatory and discretion has been provided in non -obstante clause contained in Section 273B of the Act for not imposing any penalty on the assessee if he proves that there was reasonable cause for the said failure. Reliance has been placed on a decision rendered in Commissioner of Income Tax Vs. Haryana Agro Services, 2005 279 ITR 113.;