TMI Blog1997 (3) TMI 136X X X X Extracts X X X X X X X X Extracts X X X X ..... 4AB. A show-cause notice dated 8-1-1991 was issued. After change of jurisdiction, the successor ITO also issued another show-cause notice on 17-7-1991. The assessee after taking some adjournments finally submitted a reply dated 30th July, 1991. In this reply it was stated that the assessee had filed balance-sheet, trading and profit and loss account and audit report in Form Nos. 3CA and 3CD dated 11th April, 1990 duly signed by the Chartered Accountant. The said report might have been misplaced and hence the assessee submitted one more copy of the audit report in the prescribed form. It was also stated that this audit report was already filed with the Indian Oil Corpn. and Canara Bank in May 1990 itself to get the limit increased. The Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents were duly signed by the auditors with the remark 'as per our report of even date', bearing the date of 10th April, 1990. The audit report submitted by the assessee along with the return of income might have been misplaced. He also drew my attention to section 139(9), which was also simultaneously amended when the provisions of section 44AB were amended. My attention was also drawn towards the Board's Circular No. 274 dated 23rd June, 1980 in which it was, inter alia, clarified that where the accounts of the assessee have been audited, the return should be accompanied by copies of the audited profit and loss account, balance sheet and the auditors' report. The omission to enclose these documents should be treated as a defect for which n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Canara Bank. An affidavit of the Chartered Accountant was also submitted before the departmental authorities to prove the correctness of the fact that the audit report was given by him on 11-4-1990. The learned counsel thus strongly urged that the penalty should be cancelled. 5. The learned DR strongly supported the order of the CIT (Appeals). He placed reliance on the elaborate reasons recorded in the penalty order as well as in the order of the CIT (Appeals). The learned DR also produced asstt. records of the assessee. He pointed out that in the list of annexures given in Part V containing list of documents/statement attached with the return, the audit report does not find a mention in the said list. The audit report is also not att ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espectively. The copy of the auditors' report submitted in the compilation shows that the auditors had signed the said report on 10th April, 1990. The auditors have also given an affidavit confirming this fact. 6.2 The provisions of section 271B as it stood in the relevant year provided for levy of penalty for failure on the part of the assessee to get his accounts audited before the specified date, for failure to obtain the audit report in the prescribed form before the specified date and for failure to furnish the said audit report along with the return of income submitted under section 139(1). 6.3 In the present case, the assessee had duly got his accounts audited before 10th April, 1990. The audit report was also obtained on 10/11th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... audited statements also bear the date of 10th April, 1990. These facts and circumstances clearly prove that the assessee had duly obtained the audit report within the prescribed time and in the normal course there was no reason for not annexing the said audit report along with the return of income. Even if it is assumed that the report in the prescribed form was not annexed with the return, the same could be only on account of an innocent omission on the part of the person, who prepared and submitted the return. There could be no guilty intention on the part of the assessee in not annexing the said audit report, although it was obviously obtained by him from the concerned auditors' in the month of April 1990. The law does not provide for le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the original return, which might not have been found available by the Assessing Officer when he took up the case for hearing. Such probabilities are indicated by the fact that in the audited balance sheet and profit and loss account annexed with the return, there is a clear reference of the fact of auditors' report of even date under reference to which the auditors had signed the said balance sheet. Even assuming that the report was inadvertently not annexed with the return, such an innocent and inadvertent mistake on the part of the person, who submitted the said return, would constitute a reasonable cause in terms of section 273B of the Act. 6.6 Considering the totality of the facts and circumstances of the present case, I am of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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