TMI Blog2010 (8) TMI 1054X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in levying of penalty U/s. 271 B of the Act failing to consider the fact that, the asses ee had reasonable cause for the delay in filing the audit report U/s. 44AB of the Act due to, sudden demise of the partner who was in-charge of the books of accounts, the appellant s accountant left the service, and the other partners were consistently traveling. Reliance was also placed in the case CIT V/s Tea King reported in 123 Taxman 162 and the treatment met out by the Ld. AO for the assessment year 2004-05 in the assessee's own case under similar circumstance . 2. The assessee is a firm, filed its return of income for the assessment year 2004-05, 2005-06 2006-07 together on 23.3.2007 along with the audit report u/s. 44AB. The t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... establish the firm and continue business, it took considerable time to reach to normalcy. (7) Due to all the above factors, there was delay in filing the return of income along with audit report u/s. 44AB of the Act, for all the three assessment years, which was finally complied with simultaneously on 23.3.2007. Therefore, it was prayed that the assessee had reasonable cause for the delay in filing the return and hence the penalty proceedings u/s. 271B of the Act may be dropped. 4. However, ld. AO observed that the partnership firm was reconstituted on 27.11.2004 and since then the firm was carrying on business as usual The sales were also drastically increased. All the activities of the firm attained normalcy including functioning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also considered by the ld. AO and therefore granted relief for the A.Y. 2004-05 wherein no penalty was levied. Ld. CIT(A) also considering the precarious situation gave relief to the assessee for the A.Y. 2005-06, wherein the ld. AO had levied penalty. The ld. AR prayed that when the reason for the delay in filing the return was same for all the three assessment years and since there was a cascading effect, the same ratio should be applied in granting relief to the assessee for the A.Y. 2006-07. Ld. AR further brought out that the Revenue was not in appeal for the A.Y. 2005-06, wherein CIT(A) rendered relief. 7. Ld. DR strongly opposed to the arguments of the ld. AR. It was submitted that the ld. AO had already granted relief to the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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