TMI Blog2023 (11) TMI 590X X X X Extracts X X X X X X X X Extracts X X X X ..... aware of the Act, and that therefore income earned attracts tax thereon? This is particularly so in the instant case where the assessee is presumably (i.e., going by the nature and volume of its business) an assessee (i.e., under the Act) for long. The explanation is not valid on facts as well. The assessee could validly argue non-conduct of tax audit under the Act, stating to have obtained the said report for the first time, only where it had furnished the other audit report, i.e., under the Kerala Act, of which it was aware, by the due date, i.e., 31.10.2013. The requirement of filing both the audit reports emanates from s. 44AB. It could not thus possibly be that the assessee is aware of one requirement and not of the other. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not malafide and there was no conscious disregard of it s statutory obligation by the assessee, is in that context, and is to be therefore read accordingly and not divorced there-from. Independent of it, reference to the decision in Hindustan Steels Ltd. (supra) would amount overlooking the clear provisions of section 271B r/ws. 273B of the Act, impermissible under any cannon of interpretation of statutes. Section 273B provides for the necessary leeway to account for cases where, despite due care, the lapse occurs. It may also not be out of context to state that the decision in Hindustan Steel Ltd [ 1969 (8) TMI 31 - SUPREME COURT] is premised on the consideration that penalty, which in that case was under the Sale Tax Act, is a result ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnishing no reasonable cause for the delayed submission of the audit report, as provided u/s. 273B of the Act for saving penalty, the Assessing Officer (AO) levied penalty at the minimum amount of Rs. 1,21,344, i.e., @ 0.5% on the admitted turnover of Rs. 242.69 lakhs. In appeal, it was explained that the assessee s entire income (Rs. 528.94 lakhs) was exempt u/s. 80P of the Act and, therefore, it was under the bona fide impression that it was not required to obtain tax audit report (in Forms 3CA 3CD), which stand filed with the Department for the first time. Prior thereto it had considered the audit under the Kerala Act only as in compliance of section 44AB of the Act. Relying on the clear provisions of sections 44AB and 271B of the Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty, the Hon'ble Court held that the mere fact that the audit was conducted under the Co-operative Societies Act would not be sufficient. Even assuming (without admitting) that furnishing the audit report conducted by the competent auditor under the Kerala Act was sufficient compliance with the first limb of the second proviso, it was evident that further report by an Accountant (in Forms 3CA 3CD) was not furnished by the assessee, so that there was no due compliance of section 44AB of the Act. Since the appellant had failed to show any reasonable cause , coming within the purview of section 273B, the imposition of penalty u/s. 271B cannot be interfered with. It s observations are as extracted as under: It is evident that if the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s only case is that it was not aware of the requirement of law. Could that be, one may ask, a valid explanation in law? The law implies a State policy, and to which the citizen is subject. Would it, one may ask, possible for an assessee to contend that it was not aware of the Act, and that therefore income earned attracts tax thereon? This is particularly so in the instant case where the assessee is presumably (i.e., going by the nature and volume of its business) an assessee (i.e., under the Act) for long. The explanation is not valid on facts as well. The assessee could validly argue non-conduct of tax audit under the Act, stating to have obtained the said report for the first time, only where it had furnished the other audit report, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act, i.e., form the basis for initiating assessment proceedings. The argument is thus sans any basis in law as also on facts. 4.5 Next, we may, even as we are bound by the decision in Peroorkkada SCB Ltd. (supra), consider the assessee s reliance on the order by the Tribunal in Muthiah Lakshmanan (supra). The same is rendered relying on the decision in P. Senthil Kumar vs. Pr. CIT [2019] 416 ITR 336 (Mad) by the jurisdictional High Court. In the facts of that case, the assessee explained the delayed furnishing of the audit report as due to the sudden, i.e., without notice, resigning of the Auditor in August, 2012, causing dislocation of work. The same was found satisfactory by the Hon'ble Court. Its observation, alluding to Hindus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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