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TMI Blog2007 (7) TMI 179X X X X Extracts X X X X X X X X Extracts X X X X ..... 31st March, 1986, the applicant was required to get its accounts audited and to obtain the audit report by 31st July, 1986. The audit report was, however, obtained on 10th September, 1986 and was filed along with the return of income on 22nd October, 1986. The assessment for the Assessment Year 1986-87 was completed on 30th March, 1988 vide order under the provisions of Section 143 (3) of the Act. In the assessment order there was no mention of the initiation of penalty proceedings under Section 271B of the Act. It was initiated by issuance of a show cause notice dated 16th January, 1989. The explanation given by the applicant was not found to be satisfactory by the assessing authority and vide order dated 23rd October, 1990 a penalty of Rs.95, 007/- was imposed under Section 271B of the Act. Feeling aggrieved the applicant preferred an appeal before the Commissioner of Income-tax (Appeals), Varanasi who vide order dated 15th January, 1993 had confirmed the penalty. Still feeling aggrieved the applicant preferred a further appeal before the Tribunal. The Tribunal has dismissed the appeal. 5 We have heard Sri Shakeel Ahmad, learned counsel appearing for the applicant and Sri Sham ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 246 or an appeal to the Appellate Tribunal under sub-section (2) of section 253, after the expiration of a period of-- (i) two years from the end of the financial year in which the proceedings, in the course of which action for imposition of penalty has been initiated, are completed, or (ii) six months from the end of the month in which the order of the Deputy Commissioner (Appeals) or the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal is received by the Chief Commissioner or Commissioner, which ever period expires later; (b) in any other case, after the expiration of two years from the end of the financial year in which the proceedings, in the course of which action for imposition of penalty has been initiated, are completed. Explanation. In computing the period of limitation for the purpose of this section,-- (i) the time taken in giving an opportunity to the assesses to be re-heard under the proviso to section 129; (ii) any period during which the immunity granted under section 245H remained in force; and (iii) any period during which a proceeding under this Chapter for the levy of penalty is stayed by a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant assessment year. But as it is, the default contemplated by s. 271A and s.271B are separate and distinct. Under the latter provision if the assessee fails to get his accounts audited under s.44AB, he is liable to penalty as laid down inthis section. The object is to get a clear picture of assessee's accounts whose turnover exceeds the prescribed limit. The rates envisaged two types of defaults are also different. Therefore without dilating on the issue further we find no difficulty in holding that impugned, second notice dt.11th Sept., 1989 cannot be ascribed to the direction of AO for initiation of penalty proceedings in his assessment order dt. 30th May, 1986. Since it is not covered by that order, it should be treated initiating penalty proceedings under s.271B from the date it was issued and this was not barred by time under s.275(b). This shall not, however, be construed to validate this impugned notice for all purposes, should it be suffering from some other infirmity. But it surely is not barred by time under s.275 (b) of the Act. 15 In the case of Bankey Lal Hira Lal(supra), this Court has held as follows: (page 590) "It is contended on behalf of the assessee that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... XXI could be made in cases which do not fall under section 275(1)(a) and (b) after the expiry of the financial year in which the proceedings in the course of which action for the imposition of penalty has been initiated are completed. The second part relates to the cases which prohibit the passing of an order imposing penalty after the expiry of six months from the end of the month in which action for imposition of penalty is initiated. However, the section further provides that when proceedings for imposition of penalty are initiated, whichever period expires later, would enure to the benefit of the Revenue. In the instant case, as noticed by us earlier, the assessment order was passed on February 25, 1994. In our considered view the financial year in which the proceedings in the course of which action for imposition of penalty has been initiated is required to be understood as the proceedings relating to the assessment year. The financial year in which the proceedings, in the course of which action for imposition for penalty has been initiated, can be understood as the proceedings relating to imposition of penalty...." 19 We are not concerned herein with clause (c) of sub-secti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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