TMI Blog1992 (7) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... r penalty under section 271B. He issued a show-cause notice to the assessee asking for explanation. It was the reply of the assessee that though the books of account were audited and certificate under section 44AB was obtained before due date, it could not be furnished as the return inadvertently was not filed within the time stipulated under section 139(1) due to illness of the partner, who was looking after the Income-tax matters, it had escaped his mind. He ultimately died on 25-8-1990. The A.O. felt that the explanation was unsatisfactory. He opined that there were two other partners looking after day-to-day affairs of the business could have attended the Income-tax matters of the assessee-firm as well. It was also pointed out that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out that section 139(6A) stipulates that an assessee is required to furnish such audit report along with the return. He, therefore, argued that if the return had been filed under section 139(1) without such report, then in view of section 139(6A), the return would have been treated as defective and as per explanation (bb) of section 139(9), fifteen days opportunity had to be given by the A.O. to enable the assessee to file a report and remove the defect. Hence, he argued the section cannot be construed in a way that the audit report had to be filed within the time allowed under section 139(1) of the Act. 5. His main thrust of the argument is that when the audit report under section 44AB had also ready been obtained before the said specifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 44AB. He pointed out that the audit report was filed after the due date prescribed under section 271B as the return under section 139(1) was not filed within the due time along with the report. He further argued that in view of the abolition of the words " reasonable cause " w.e.f. 1-4-1989, from section 271B, the submissions of the assessee regarding the delay have become infructuous. 7. To appreciate the issue properly, I prefer to quote section 271B, which reads as under : " Section 271B : If any person fails to get his accounts audited in respect of any previous year or years relevant to an assessment year or obtain a report of such audit as required under section 44AB or furnish the said report with the return of his income file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ently the report with it and as there is no provision to file the report independently, whether it was liable for penalty under section 271B? But the conjoint analysis of sections 44AB and 271B has clarified the confusion. I feel if the legislature intended, that if an assessee does not file the report under section 44AB as well as the return within the prescribed time under section 139(1) the assessees would be liable for penalty, then it would have been sufficient to enact that failure to file the report within the time stipulated under section 139(1) along with the return, penalty can be levied. (It may be pointed out that the time stipulated in section 44AB and section 139(1) are identical in the case of return to be filed with the audi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e a rationality with the view of CBDT. 13. I am unable to accept that the deletion of words " without reasonable cause " from section 271B of the Act w.e.f. 1-4-1989 had made the reasonable cause as redundant for the purpose of applying the section as suggested by the learned Departmental Representative. It would be seen that the section still retains the word " made ". From this it emerges that the penalty still is discretionary. Moreover, section 273B postulates that no penalty quoted in that (section 271B is one of them) can be levied if the assessee proves that there was reasonable cause for the failure. In this case, it is not disputed that the partner who used to look after the Income-tax matters had after prolonged illness in the h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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