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2015 (12) TMI 392 - ITAT DELHI

2015 (12) TMI 392 - ITAT DELHI - TMI - Penalty u/s 271B - assessee has obtained the tax audit report on 30th September 2008 and not before 30th September, 2008 - CIT (A) confirmed penalty holding that assessee has committed a default by not getting its accounts audited before the due date - Held that:- The meaning of the word ‘before’ in section 44AB of the Act is cloudy and uncertain. The word is possible of two meanings, one being the common meaning and the other as given in Chamber’s Twentiet .....

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AM For The Appellant : Sh. Rajiv Jain, CA For The Respondent : Sh. Hemant Gupta, SR. DR ORDER Per Prashant Maharishi, AM: 01. This appeal is preferred by the assessee against the order of CIT(A) dated 27.08.2013 confirming the penalty of ₹ 1,00,000/- u/s 271B of the Income Tax Act. 02. Brief facts of the case are that the assessee is a partnership firm filed its return of income on 30th March, 2009 showing total income of ₹ 58,57,760/- and assessment was completed u/s 143(3) on 24th .....

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, which was within the time prescribed for obtaining tax audit report. However, AO was of the view that according to provisions of Section 44AB assessee is required to get his accounts audited before specified date and not on the specified date. Therefore, as assessee has obtained this tax audit report on 30th September 2008 and not before 30th September, 2008, therefore, levied penalty of ₹ 1,00,000/- u/s 271B of the IT Act. Against this, assessee-preferred appeal before the CIT (A) who c .....

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e submitted that assessee has obtained tax audit report in time and there is no default u/s 271B. For this proposition, he relied on the decision of Hon ble Bombay High Court in case of Prem Chand Nathmal Kothari vs. Kishanlal Bachharaj Vyas & Ors. dated 5th April 1975 reported in AIR 1976 Bombay 82 wherein relying on the Chambers Dictionary it has been held that word before means previous to the expiration of . Therefore, before 30th September, 2008 means before the end of 30th September 20 .....

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dit report before 30th September 2008 but obtained only on 30th September 2008. Therefore, the penalty is rightly levied u/s 271B of the Act. 05. We have carefully considered the rival submissions and perused the various decisions cited before us. In this case it is undisputed that assessee has obtained the tax audit report on 30.09.2008. Requirement of provision of section 44AB is that Every person,- (a) carrying on business shall, if his total sales, turnover or gross receipts, as the case may .....

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ins so deemed to be the profits and gains of his business, as the case may be, in any previous year, get his accounts of such previous year audited by an accountant before the specified date and furnish by that date the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed: …… Explanation - for the purposes of this section,- (ii) "specified date", in relation to the accounts of the a .....

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s not just "get his accounts of such previous year audited by an accountant before the specified date", but "get his accounts of such previous year audited by an accountant before the specified date and obtain before that date the report of such audit in the prescribed form". Thus, there are two requirements, the first being to get the accounts audited and the second being to obtain a report of such audit in the prescribed form i.e. prescribed in Rule 6G of the Income-tax Rul .....

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h the return of his income filed under sub-section (1) of section 139, or along with the return of income furnished in response to a notice under clause (i) of subsection (1) of section 142, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum equal to one-half per cent of the total sales, turnover or gross receipts, as the case may be, in business, or of the gross receipts in profession, in such previous year or years or a sum of one hundred thousand rupees, whi .....

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ression "before the specified date" as "by the specified date". 18. The learned counsel has rightly brought to our notice that a similar expression "before the expiry of four months from the end of the previous year" was used in section 139(1)(a) of the Act as it stood at the relevant time, which was interpreted by the department in practice as "by 31st July" in the case of previous years ending on 31st March. This is borne out by C.B.D.T. Circular No. 549 .....

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four months from the end of the previous year or before the 30th of June of the relevant assessment year, whichever was later, i.e., it could be either 30th June or 31st July. In the case of other persons, not deriving income from business or profession, the date was 30th June. Also, on an application made by the assessee in the prescribed form, the Income-tax Officer was empowered to extend the date for filing the return of income subject to chargeability of interest under section 139(8). With .....

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eturns would have been filed with the Department, mostly towards the end of July every year, causing a glut of such returns within a very short period. To remove these difficulties, the Amending Act, 1987, has substituted a new sub-section (1), which staggers the dates for filing the returns of income by defferent classes of assessees." 19. We have also gone through carefully the decisions of the Bombay High Court in Premchand Nathmal Kothari s case (supra). The Hon ble High court interpret .....

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anguage of the statute itself and no external aid is admissible to construe those words. It is only where the language is ambiguous, uncertain, cloudy or susceptible or more than one meaning or shades of meaning that external aid will be permissible. The following extract from a decision of the Supreme Court in Sheikh Gulfan v. Sanat Kumar AIR 1965 SC 1839 was relied upon :- "Normally, the words used in a statute have to be construed in their ordinary meaning, but in many cases, judicial ap .....

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true scope and effect of the relevant words in any statutory provision, the context in which the words occur, the subject of the statute in which the provision is included, and the policy underlying the statute assume relevance and become material. As Halsbury has observed, the words should be construed in the light of their context rather than what may be either their strict etymological sense or their popular meaning apart from that context . " 20. Thereafter certain other parts of the A .....

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