- (1.) SINCE both these appeals involve a common question of law, the same are being disposed of by this common judgment.
(2.) THESE appeals are directed against the judgment and order of the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur (for short "the Tribunal"), dated October 20, 1999. The appeal was admitted in terms of the following question: "Whether the Tribunal was right in law in sustaining the penalty of rupees one lakh for each year after proper interpretation of Section 271B read with Section 273B of the Act ?" The relevant assessment years are 1990-91 and 1991-92. The Assessing Officer has initiated proceedings for penalty for the assessment years 1987-88 to 1991-92. The turnover of the assessee was more than Rs. 40 lakhs. During these three years, the assessee was obliged to file report in Form No. 3CD along with audited balance-sheet, profit and loss account with the return as per the requirement of Section 44AB of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), which came into effect from the assessment year 1985-86, which requires that each assessee whose turnover is more than Rs. 40 lakhs is liable to get its accounts audited by a chartered accountant before the specified date and to obtain an audited report before the due date. The assessee has not submitted the audit report along with the return in all these cases. Therefore, the Assessing Officer has levied the penalty of rupees one lakh for each of the assessment years under Section 271B of the Act. In appeal, before the Tribunal, the Tribunal has also affirmed the penalty levied by the Assessing Officer. In appeal before the Tribunal, the Tribunal found that there was reasonable cause in the first three years (i.e., for the assessment years 1987-88, 1988-89 and 1989-90) for not filing the audit report as required under Section 44AB of the Act. Hence, the Tribunal cancelled the penalty for these three years. For the assessment years 1990-91 and 1991-92, the Tribunal found that there was no reasonable cause with the assessee for not submitting the audit report as required under Section 44AB of the Act. Hence, it confirmed the penalty for these two assessment years. Heard, learned counsel for the parties.
(3.) MR.P.K. Kasliwal, learned counsel for the appellant, submits that in the case of the assessee, the Accountant-General is the concerned person and only the competent authority to audit the accounts. It cannot get its accounts audited by any other accountant and unless it receives the audit report for the preceding years, it cannot make available the accounts to the Accountant-General for audit for the subsequent year. Mr.R.B. Mathur, learned counsel appearing for the Revenue, submits that whether the assessee has a reasonable cause for not submitting the audit report for the years 1990-91 and 1991-92, the Tribunal has considered the explanation in para. No. 9 of its judgment and found that for both these assessment years, the assessee has no reasonable cause to file the audit report. Para. No. 9 of the Tribunal's judgment reads as under : "9. Now we will take up the penalty issue for the assessment years 1990-91 and 1991-92. We noted that the accounts for these two years were handed over to the Accountant-General office on December 29, 1990, and March 3, 1992. In this way we noted that the accounts book for the assessment year 1990-91 were handed over to the Accountant-General office on the last day of the due date. Being last date on December 30, 1990, the accounts were handed over on December 29, 1990, and the accounts for the assessment year 1991-92 were handed over on March 3, 1992. It was beyond the due date. Due date was December, 1991, and the accounts were handed over in March, 1992, and we have seen also that final report for 1989-90 was handed over to the assessee on August 28, 1990, and for 1991-92 the audit report was received on January 20, 1992. It means there is no bona fide on the part of the assessee that why it delayed in handing over the accounts to the Accountant-General office. Therefore, we are of the view that there was no reasonable cause for getting the accounts audited and seeking report as per the provisions of Section 44AB for these two years. Accordingly, we confirm the penalties for these two years. Penalties for the assessment years 1987-88, 1988-89 and 1989-90 are deleted and the penalties for the assessment years 1990-91 and 1991-92 are confirmed." Mr.Kasliwal, learned counsel appearing for the assessee, has submitted a chart showing the details regarding the specified date of audit, date on which annual accounts of the assessee were rendered to the Accountant-General office for audit, date on which audit certificate was issued and the date on which the tax report was received. The relevant details read as under : JUDGEMENT_262_ITR262_2003Html1.htm ;