TMI Blog1999 (3) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the case of ITO vs. Mohinder Kumar (1992) 45 TTJ (Del) 326 : (1992) 42 ITD 384 (Del). The CIT(A) further held that the audit report in this case was obtained in time and even on legal grounds as per the decisions mentioned supra penalty under s. 271B was not leviable. 4. In the appeal before us, the learned Departmental Representative, Shri P.N. Dixit referred to the provisions of s. 44AB where the word used is "obtained" and not "furnished". The fact that the assessee filed the return and audit report on 15th Jan., 1991, shows that the audit report was not ready on or before 31st Dec, 1990. If that was so the assessee would have furnished the return and audit report by 31st Dec, 1990 itself. Therefore, the only presumption that can be drawn was that the audit report was obtained after the "specified date". The learned Departmental Representative further submitted the words "is satisfied and in the course of assessment proceedings" occurring in s. 271 are significantly absent in s. 271B. Therefore, the default on the part of the assessee automatically would invite levy of penalty under s. 271B. On the strength of this argument the learned Departmental Representative supporte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whichever is less." Sec. 44AB in force at the relevant time reads as under: "Every person- (a) carrying on business shall, if his total sales, turnover or gross receipts as the case may be, in business exceed or exceeds forty lakh rupees in any previous year; or (b) carrying on profession shall, if his gross receipts in profession exceed ten lakh rupees in any previous year get his accounts of such previous year audited by an accountant before the specified date and obtain before 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 that this section shall not apply to the person who derives income of the nature referred to in s. 44AC or s. 44B or s. 44BB or s. 44BBA or s. 44BBB on and from the 1st day of April, 1985 or as the case may be the date on which the relevant section came into force, whichever is later: 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 profess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 91. 8. In this context it is pertinent to observe that before the CIT(A) it was argued that the assessee was very much aware that a return was due on 31st Dec, 1990, and the tax audit report dt. 28th Dec, 1990, was obtained well within the time and it was due to be filed along with the return. In the meantime the Chartered Accountants Association, Ahmedabad and the Income tax Bar Association had made a request to the Finance Minister on 23rd Dec, 1990, for the extension of time for filing the IT return in case of the companies. The representation was rejected by the letter No. Adm./I/117-4/89, dt. 22nd Jan., 1991. In the past when similar petitions were made, the due date was extended and, therefore, the assessee was under the honest impression that the due date for the submission of return would be extended during this year also. 9. When we consider the fact that the assessee filed the return of income on 15th Jan., 1991, along with the audit report dt. 28th Dec, 1990, can it be said that the audit was done and the audit report obtained on a date after 31st Dec, 1990? It is true that there is failure to file the return by the due date. Such failure attracts penalty proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a period of 15 days from the date of such intimation or within such further period which he may in his discretion allow. A return is considered defective if any of the various conditions enumerated in the Expln. to s. 139(9) is not fulfilled. One such condition is that a return not accompanied by the audit report obtained under s. 44AB is defective. This means that even if the assessee had filed the return of income by the due date i.e., by 31st Dec, 1990, the assessee would have got the benefit of extended period of 15 days or more if the defect pertaining to the non-filing of audit report was intimated to him by the AO. Therefore, it is clear that even if the assessee did not file the audit report along with the return of income he could rectify the defect after it was pointed out to him by the AO. This means that the legislature intended the filing of audit report as a necessary corollary to the filing of return. Viewed in this light it is clear that the assessee is entitled to the benefit of doubt even if it is presumed that the delay in filing the return in this case along with audit report is not properly explained to the satisfaction of the AO. 11. Another legal point inv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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