TMI Blog2015 (3) TMI 321X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the delay was not intentional, but due to circumstances beyond the control of the assessee Filing of audit report is not mandatory and it is directory. Moreover, the explanation offered by the assessee for the delay satisfies the reasonable cause to be shown by the assessee. - Decided in favour of the assessee. - T.C.(A). No. 540 of 2007 - - - Dated:- 18-2-2015 - R. Sudhakar And R. Karuppiah,JJ. For the Appellant : Mr. R Sivaraman For the Respondent : Mr. J Narayanasamy Senior Standing Counsel ORDER Per : R Sudhakar : The assessee 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 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d this appeal on the questions of law referred supra. 3. We have heard Mr.R.Sivaraman, learned counsel for the assessee and Mr.J.Narayanaswamy, learned Senior Standing Counsel appearing for the Revenue and perused the orders passed by the Tribunal and the authorities below. 4. The core question that arises for our consideration is 'If filing of the audit report along with the return is not mandatory, but directory, whether penalty is leviable?' 5. In the case on hand, the assessee filed return of income on 27.3.1990 and the audit report was obtained on 27.4.1990 and submitted during the course of the assessment proceedings. The reason given by the assessee for the delay in submitting the audit report was that the books were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivision Bench of the Madhya Pradesh High Court interpreted section 271B along with section 44AB of the Act and held as under: The provision of section 271B of the Income-tax Act, 1961, makes it clear that the imposition of penalty for non-compliance with the provision of section 44AB is not mandatory. The word 'may' used in that section gives discretion to the Assessing Officer to impose penalty or not to impose penalty. Further, the provision of section 273B contains a non obstante clause and provides that notwithstanding the provision of section 271B, no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provision if he proves that there was reasonable cause fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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