TMI Blog1993 (8) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment year 1986-87, the assessee was liable to have its accounts audited under section 44AB of the Income-tax Act. The due date for obtaining the Audit Report was 30-6-1986. However, the Audit Report under section 44AB was obtained by the assessee only on 30-9-1986. The Audit Report was filed along with the return of income on 21-10-1986. The Assessing Officer completed the assessment and initiated proceedings for penalty under section 271B of the Act. The assessee explained in the course of the penalty proceedings that the Auditor M/s. S. K. Singhania Co., 19-A, Chowringhee Road, Calcutta had been entrusted with the audit work and they had informed the assessee that in view of the heavy pressure of work and other professional commitm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant. Yet, it is seen that the appellant wake up to such requirement of law only towards the middle of June 1986 while the entire work of auditing the accounts should have been completed by 30-6-1986. Therefore, at that late stage if the auditor express their inability to complete the work of auditing the appellant's accounts it could not be said that the blame can in the doorsteps of the auditors. Having regard to the stringent of provisions of section 44AB read with section 271B, the appellant should have taken adequate steps well in advance to have its accounts audited in time. The contention of the A/R that form No. 6 was filed seeking extension of time also has no merit because the extension of time was sought for reasons that the acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion was drawn to the decision of the Calcutta High Court in CIT v. Sulekha Works (P.) Ltd. [1985] 156 ITR 190. On the other hand, the Ld. Departmental Representative, pointed out that the assessee had waited till April 1986 to hand over the books of accounts to the Auditors whereas its accounting year ended on 12-11-1985 itself. According to the Departmental Representative this shows the lack of vigilance on the part of the assessee. It was further pointed out that the delay in the office of the Auditor cannot constitute reasonable cause for the delay in getting the accounts audited in time under section 44AB of the Act. It was, therefore, contended that the penalty was rightly imposed and sustained. 6. On a consideration of the rival c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orks (P.) Ltd. [1985] 156 ITR 190 (Cal.), the decision relied on by the assessee before us, that any delay in getting the accounts audited would constitute reasonable cause for the delay in filing the return of income. The Calcutta Bench of the Tribunal has also held that the finalisation of the accounts of the assessee for an earlier year which took considerable time would constitute reasonable cause for the delay in complying with the provisions of section 44AB of the Act [please see ITO v. Arun Kumar Bhuwalka [1992] 40 ITD 373 (Cal.)]. We have to therefore hold that the delay in completing the audit constituted reasonable cause in the present case for the delay in getting the Audit Report from the Auditor's M/s. Singhania Co. under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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