TMI Blog1993 (5) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... aws by a proper presentation of the accounts before the tax authorities and considerably saving the time of Assessing Officers in carrying out routine verifications, like checking the correctness of totals and verifying whether purchases and sales are properly vouched or not and further the time of the Assessing Officers thus saved could be utilised for attending to more important investigational aspects of a case. With these considerations in view, the Legislature introduced by Finance Act, 1984, the requirement of audit of accounts of other assessees as well, if the business turnover exceeded Rs. 40 lac or the professional receipts Rs. 10 lac in any year or years relevant to assessment year 1985-86 and subsequent years, before a specific date, by inserting the provisions of section 44AB of the Act. The section as it stood in assessment year 198889 was as under : 44AB. 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 years relevant to the assessment year commencing on the first day of April, 1985 or any subsequent assessment year ; or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee stated the following reasons for the delay : " The assessee is engaged in the business of trading in grey cloth and sarees. The total quantity handled by the assessee runs into lacs of meters. The books of accounts of the concern are written in Gujarathi script by the person known as ' Mehtaji '. The accountant, namely, Mehtajis are not conversant and familiar with the complicated provisions of the income-tax laws and the tax audit proceedings. Due to a large volume of work, a lot of clerical labour is involved. Due to the immense volume of transactions lot of time is required to finalise the accounts. Moreover, the requirements of the tax audit are to be made and various provisions of the Income-tax Act to be complied with. A thorough scrutiny of details is required to be made to comply the tax audit requirements. While preparing the details the routine work is to be attended and hence, time is also devoted to the maintenance of books of accounts for the period subsequent to the period of audit. All the above reasons have a combined effect of the delay in completion and submission of tax audit report. Thus, there is a reasonable cause in the delay in obtaining tax au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that no penalty proceedings were initiated for the delayed filing of the return, under section 271(1)(a) of the Act, for the same default. 5. The learned Departmental Representative, Sri R.N. Bhadgaonkar, on the other hand, submitted that the two cases relied upon by the learned counsel for the assessee, were rendered under the provisions of Companies (Profits) Surtax Act and Super-Profits Tax Act, which are not in parimateria to the provisions of the Income-tax Act, 1961. The provisions of section 271B of the Act, according to him, are clearly applicable. He further submitted that the certificate in question is a new evidence and the assessee is trying to make out a new case to attribute the delay to the auditors. In any case, the auditors say that the audit was commenced in June 1988 and completed in March 1989, but no reasons are stated for the delay. They have not accepted the delay to be on their account. Non-initiation of the proceedings under the provisions of section 271(1)(a) of the Act, he submitted, might be by a mistake on the part of the ITO, or the delay in obtaining the audit report itself could be a reasonable cause for the delayed filing of the return and, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of super profits tax payable ........ Provided that the Income-tax Officer shall not impose any penalty under this section without the previous authority of the Inspecting Assistan Commissioner." This section, on the first impression, appears to be in pari materia to section 271B of the Income-tax Act, but on a careful consideration, one finds that the provisions referred to in section 10 of the Super Profirs tax Act talks about the requirement of filing of a return under section 6 of the said Act and the provisions of section 271B of the Income-tax Act requiring to obtain an audit report under section 44AB are quite different. Section 6 of the said Act provides under sub-section (1) to file the return voluntarily before a specified date, but sub-section (3) thereof also authorises the assessee to file the return at any time before the assessment is made. On the contrary, in section 44AB of the Income-tax Act, the requirement for obtaining the audit report within the specified period alone is there, and there is no provision authorising an assessee to obtain the report thereafter. It is with reference to this provision, the Court held as under : " If it was the intention o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Thus, an important rule of construction is that if the words of a statute are precise and unambiguous, they must be accepted as declaring the express intention of the Legislatures. The second important aspect is that if the interpretation of a fiscal enactment is open to doubt, the construction most beneficial to the subject should be adopted. See CIT v. Vegetable Products Ltd. [1973] 88 ITR 192 (SC). Their Lordships have observed at p. 195: " If we find language to be ambiguous or capable of more meanings than one, then we have to adopt that interpretation which favours the assesee, more particularly so because the provision relates to imposition of penalty.' Therefore, looking to the scheme of the C.(P) S.T. Act, the purpose which it was intended to serve and the clear language used in the relevant provisions, we are inclined to agree with the view taken in the Calcutta Chromotype (P.) Ltd. [1971] 80 ITR 627 (Cal.) and hold that the ITO is not entitled to impose a penalty on the ground of the failure to file a return within the time prescribed under sub-section (1) or sub-section (2), of section 5 when the return is filed before the assessment is made and the ITO accepts it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consuming. The requirements of tax audit are to be complied with. Therefore, a thorough scrutiny of details is required to comply with the tax audit requirements. While preparing these details the routine work is to be attended and hence, time is also devoted to the maintenance of books of accounts of the period subsequent to the period of audit. All the above reasons have a combined effect of the delay in completion and submission of the tax audit report." 10. A similar plea was raised by the assessee in the case of Jagdamba Textiles v. Asstt. CIT and the Division Bench vide order in [IT Appeal Nos. 4361 to 4364 (Bom.) of 1992, dated 12-4-1993], rejected same by observing as under : " Having gone through the cause for delay reproduced herein before, we are of the opinion that there exists no reasonable cause in not getting accounts audited within the specified date. No circumstance aliunde to which delay could be justified was stated before us. The explanation offered by the assessee concerns with the circumstances which normally prevails in every trade or business. Just because, Methaji was not familiar with the income-tax law or large volume of work, it cannot be said that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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