2015 (3) TMI 321

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..... essee has filed this appeal challenging the order of the Income Tax Appellate Tribunal 'B' Bench, Chennai, dated 21.6.2006 made in I.T.A.No.528/Mds/2001 for the assessment year 1987-1988, and the same was admitted on the following questions of law: (i) Whether, on the facts and circumstances of the case, the Assessing Officer having initiated penal action under Section 271B of the Income .....

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..... ceedings dated 4.9.1991 levied penalty under Section 271B of the Act. 2.2. Aggrieved by the said order, the assessee appealed to the Commissioner of Income Tax (Appeals), who confirmed the order passed by the Assessing Officer. 2.3. On further appeal by the assessee, the Tribunal confirmed the orders passed by the lower authorities and held that there is no reasonable cause for delayed filing of .....

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..... hat the books were impounded on 29.12.1989. The retention of seized/impounded books of accounts and documents is evidenced by the letter dated 29.12.1989 issued by the Assistant Commissioner of Income Tax, Central Circle II-(3), Chennai. Therefore, it is evident that the delay was not intentional, but due to circumstances beyond the control of the assessee. 6. In this backdrop, we would like to a .....

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..... he Calcutta High Court held that imposition of penalty under section 271B of the Act is not automatic and in appropriate case, the competent authority, on being satisfied with the explanation given by the assessee, is free not to impose penalty. (iii) In ITO v. Nanak Singh Guliani [2002] 257 ITR 677, a Division Bench of the Madhya Pradesh High Court interpreted section 271B along with section 44A .....

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..... s not mandatory and it is directory. Moreover, the explanation offered by the assessee that the delay in submitting the audit report was due to the fact that the books were impounded by the department, in our considered opinion, satisfies the reasonable cause to be shown by the assessee. For the foregoing reasons, we allow the appeal by setting aside the order passed by the Tribunal, by answering .....

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