TMI Blog2014 (4) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... mine the balance sheet and profit and loss account and certify that the same are in agreement with the books of account maintained by the assessee, whereas form 3CA only requires the audit report along with audited financial statement to be annexed with the report - primarily the only difference in form 3CA and form 3CB is that in form 3CA the Auditors are not required to give separate audit report - when an assessee had furnished the tax audit report in form 3CB then it cannot be said that it has not complied with the provisions of sec. 44AB merely because the report is not in form 3CA which was not possible for assessee to furnish - law does not require an assessee to do impossible - form 3CB, form 3CA are not mutually exclusive but form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accept the assessee s contention and initiated penalty proceedings u/s 271B. Before AO the assessee had filed its reply dated 20th January, 2012 which is reproduced hereunder: The assessee vide its letter dated 20/01/2012 contended that: The Company as the per franchise conditions of the Franchisor closed its accounts on 31/12/2008. To comply with the I.T. Act provisions the company prepared its accounts for the remaining period of three months i.e. upto 31/03/2009, on provisional basis. Further, the audited accounts upto 31/12/08 were not available for certain unavoidable reasons until the tax audit was taken up and hence it was conducted as if the complete accounts were unaudited. The Audited Accounts were submitted during t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... comply with the provisions of section 44AB. He restricted the penalty to Rs. 1 lakh as was applicable for the relevant assessment year. 6. Being aggrieved with the order of ld. CIT(A), the assessee is in appeal before us. 7. Ld. Counsel for the assessee submitted that assessee had filed return of income on 30th September, 2009 and in the return furnished all the details in regard to tax audit report which was also obtained on 30th September, 2009 in Form 3CB along with Annexure in Form 3CD had been furnished. Ld. Counsel submitted that since the statutory audit got completed on 27th November, 2011, therefore, it was not possible to furnish the report in Form 3CA along with annexure in Form 3CD and, therefore, assessee had furnished th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ersy in the present appeal is that if an assessee is required to get its account audited under any other law but the said audit has not been completed by the specified date for furnishing the return of income then could he furnish tax audit report in form 3CB or not and if assessee has furnished the report in form 3CB whether any default can be imputed to assessee or not. In order to properly appreciate the controversy, we reproduce section 44AB along with Rule 6G and relevant reports in form 3CA and 3CB: Sec. 44AB Every person, - (a) carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds [one crore rupees] in any previous year or (b) carrying on profession shall, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sufficient compliance with the provisions of this section if such person gets the accounts of such business or profession audited under such law before the specified date and furnishes by that date the report of the audit as required under such other law and a further report by an accountant in the form prescribed under this section. Rule 6G (1) The report of audit of the accounts of a person required to be furnished u/s 44AB shall, - (a) in the case of a person who carries on business or profession and who is required by or under any other law to get his accounts audited, be in Form No. 3CA; (b) in the case of a person who carries on business or profession, but not being a person referred to in clause (a), be in Form No. 3CB. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 44AB. In such a situation the assessee is left with no other alternative but to furnish the report in form 3CB along with form 3CD to make substantial compliance with the provisions of section 44AB. If we accept the interpretation placed on 2nd proviso to section 44AB by ld. CIT(DR) then it would result in furnishing the TAR only after the statutory audit is completed under other provision of the relevant Act. In our humble opinion, this is not the object of incorporation of 2nd provision to section 44AB. It is well settled law that proviso cannot expand or limit the construction of principle provision. It is cardinal principle of interpretation that the language of a proviso is to be construed in relation to the subject matter covered by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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