TMI Blog2001 (8) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... , on the facts and in the circumstances of the case, the Tribunal is justified in law in cancelling the penalties under section 271B of the Income-tax Act levying Rs.29,352, Rs.29,709 and Rs.48,163 for the assessment years 1985-86, 1986-87 and 1987-88, respectively? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal is justified in law in observing and holding that: it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s) gave the reason that penalty under section 44AB is not automatic and that the accountant of the assessee was ill and ultimately expired in 1988, he cancelled the penalty levied by the Assessing Officer. In appeal before the Tribunal, the Tribunal though confirmed the order of the Commissioner of Income-tax (Appeals) but on the ground that it is not possible to file the audit report as requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d reliance on the decision of the Allahabad High Court in the case of CIT v. Jai Durga Construction Co. [2000] 245 ITR 857. Considering the submissions though we are not agreeable with the reasons given by the Tribunal that it is impossible to comply the provisions of section 44AB for auditing the accounts, but as the Commissioner of Income-tax (Appeals) has accepted the reasons of illness of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 134 when penalty under section 44AB is not automatic and if some reasonable cause has been shown if the accounts are not audited on or before due date, no penalty should be imposed. In the result, we answer question No. 1 in the affirmative, i.e., in favour of the assessee and against the Revenue. Question No. 2, we answer in the negative, i.e., against the assessee and in favour of the R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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