TMI Blog2006 (10) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... chosen to initiate proceedings in terms of the Income-tax Act (for short, "the Act"). Thereafter, penalty proceedings were initiated. The appellant was heard and penalty was levied. The same was challenged unsuccessfully both before the Appellate Commissioner and the Tribunal. The assessee having lost at all levels is before us by raising the following questions of law for our consideration: "(1) Whether the Tribunal was justified in holding that penalty under section 271B of the Act was exigible for the belated audit reports under section 44AB of the Act in spite of the fact that the audit reports were obtained and enclosed along with the returns filed by the appellant? (2) Whether on the facts, the penalty under section 271B of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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, whichever is less." The said provision has been considered by several High Courts. The Gujarat High Court in a judgment reported in Rajkot Engineering Association v. Union of India [1986] 162 ITR 28 has noticed the scope of section 271B and also section 44AB for the purpose of levy of penalty. The Gujarat High Court has noticed that it will be for the Department to prima facie show that there was want of reasonable cause on the part of the assessee for committing the defau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion has to be softened. Even the application for extension of time may be for the reason that the accounts were not complete and if that was the position the accounts could not have been audited. In any case the finding which has been recorded, that there was reasonable cause, cannot be considered to be perverse or illegal in any manner. In these circumstances, we are of the opinion that the Income-tax Appellate Tribunal was justified in cancelling the penalty under section 271B. The penalty under section 271B cannot be considered to be leviable in every case. It appears that the provisions of section 273B were not specifically mentioned by the Tribunal in its order and therefore, the proper interpretation of law would be that the penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty would be levied. All these reasons have been considered to be unacceptable by the Assessing Officer. In that view of the matter, he has chosen to impose penalty. We do not find any illegality in the order passed by the Assessing Officer. The ignorance of the Income-tax Act cannot be a ground for non-writing of the books of account as contended by the assessee. In these circumstances, the Assessing Officer, in our view has taken a right view in levying penalty. When the same was challenged before the appellate authority, the appellate authority, without noticing the facts properly, has chosen to refer to case law and allowed the appeal and the same was challenged before the Tribunal. The Tribunal, noticing the facts in the light of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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