TMI Blog1997 (6) TMI 364X X X X Extracts X X X X X X X X Extracts X X X X ..... under obligation to get its accounts audited and to obtain the report of tax audit before the specified date which in this case was 30-6-1986 because the previous year for the assessment year 1986-87 had ended on 30-6-1985. Disputing the findings of the CIT(Appeals), the learned D.R. submitted that the assessee was to procure the tax audit report before the specified date even if its accounts were required to be audited under the Companies Act and as the assessee had failed to obtain the tax audit report, the CIT(Appeals) was not justified in cancelling the penalty. In support of these submissions, the learned D.R. heavily relied on the observations of the Special Bench of the Tribunal in the case of Asstt. CIT. v. Gayatri Traders [1996] 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ravened the requirement of section 44AB. 3. The other plea taken by the assessee s counsel was that after getting its accounts audited under the Companies Act, the assessee had to obtain the tax audit report from a different Chartered Accountant and as the accounts of the assessee s Branch Offices were required to be brought to Bombay from various places throughout India so, the delay in obtaining the audit report was on account of reasonable cause beyond the control of the assessee. 4. The last line of argument taken by the assessee s counsel was that the default in not obtaining the tax audit report before the specified date was of technical and venial nature for which imposition of penalty is not justified. In support o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 : Provided ****** Provided further that in a case where such person is required by or under any other law to get his accounts audited, it shall be sufficient compliance with the provisions of this section if such person gets the accounts of such business or profession audited under such law before the specified date and furnishes by that date the report of the audit as required under such other law and a further report in the form prescribed under this section. From the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f these words for third requirement leads to one and the only conclusion that the legislature has consciously avoided the limitation for obtaining the report of audit in the form prescribed under section 44AB. Had it not been the case, then the legislature should have, instead of using the three different sentences; should have used only one sentence in the form if such person gets the accounts audited under such law and obtains the report of audit both as required under such other law as well as under this section; before the specified date . We are, therefore, of the opinion that in case of those assessees who were covered by second proviso to section 44AB, there was no time limit for obtaining the tax audit report. (ii) One mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it is an admitted fact that it had got its accounts audited under the Companies Act and had obtained the report of audit under that Act on 24-2-1986 which was well before the specified date and had obtained the report of audit in Forms 3CA and 3CD though after the specified date we are of the opinion that all the requirements of section 44AB, read with second proviso had been satisfied and the assessee was not liable to penalty under section 271B. 9. Even otherwise, the default, as claimed by the assessee; was of technical and venial nature for which we are of the opinion; penalty is not justified and in support of this conclusion, we rely on the decision of the Hon ble Supreme Court in the case of Hindustan Steel Ltd. v. State o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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