TMI Blog2001 (3) TMI 263X X X X Extracts X X X X X X X X Extracts X X X X ..... ich reads as under: "The learned CIT(A) has erred on facts and in law in not cancelling the penalty as the same was barred by limitation on the basis of provisions contained in s. 275 of the IT Act, 1961." ITA No. 2759/All/1992 3. The facts concerning the matter are as follows. 4. The assessee, a Government Corporation filed return of income on the basis of provisional account. The assessee-corporation was also required to get its account audited in view of the provisions contained under s. 44AB of the Act and to file the audit report as its turnover was in excess of Rs. 40 lakhs. As the assessee failed to get the accounts audited under the Companies Act and under the provisions of s. 44AB of the Act, the AO initiated penalty proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter considering the plea of the assessee as convincing and reasonable held that the auditors could not be appointed by the office of the C. A.G., because the audit work of earlier year was pending and, therefore, the assessee-appellant was prevented by a reasonable cause for obtaining the tax audit report required in terms of s. 44AB of the Act. Thus, the CIT(A) cancelled the penalty. 7. Before us, Shri D.K. Shrivastava, learned senior Departmental Representative submitted that the delay was attributable on the part of the assessee as the assessee itself could not complete its books of account. The learned senior Departmental Representative also contended that the CIT(A) has not properly appreciated the fact that the return of income for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shal was that since audit in pursuance of the provisions contained in s. 619 of Companies Act were to be made, it was not possible for the assessee to get the audit complete under IT Act by appointing its own auditors. 10. With regard to additional ground reproduced above, Shri Kanchan Kaushal made specific submissions. According to him, the return for asst. yr. 1989-90 was filed by the assessee on 26th Dec, 1989, in response to notice under s. 142(1) and assessment was completed under s. 144 on 31st Dec, 1992 and thereafter CIT(A) vide his order dt. 12th Sept., 1996, set aside the assessment for making fresh assessment de novo on the basis of audited accounts, which assessment was completed on 27th Feb., 1997 finally. In this background, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts of each case are to be examined in order to ascertain bona fide, promptitude, sincerity and of reasonable care on the part of the assessee. Every cause cannot qualify the definition of "reasonable cause". It is only that cause, which is beyond the control of the assessee, which can be a basis for exoneration of liability. If the assessee himself or itself was not vigilant or did not take appropriate steps for ensuring compliance of statutory provisions, then he cannot advance the pleas of reasonable cause. So far as the instant case is concerned, the assessee has failed to prove that it took all the steps to get the accounts audited within the stipulated or prescribed time by the auditors. The assessee has not come forward with the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings started on the date of filing of the return and the notice issued on 29th March, 1990 initiated the penalty proceedings. After going through the records, we find the following facts as undisputed facts. 14. The notice under s. 139(9) was issued on 27th March, 1990; another notice on the same date was issued by the AO. Even in the penalty order it is mentioned that the show-cause notice under s. 271B was issued on 27th March, 1990. In the assessment order also, the same fact has been mentioned. Thus, it remains undisputed that penalty proceedings were initiated by the show-cause notice dt. 27th March, 1990. In view of the provisions contained in s. 275, the penalty order should have, therefore, been passed within the time limi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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