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C.I.T. Lucknow v. Daruka Industries - INCOME TAX REFERENCE No. 39 of 1996  RD-AH 1019 (11 April 2005)
INCOME TAX REFERENCE No.39 Of 1996.
Commissioner of Income-tax, Lucknow. Applicant
M/S Daruka Industries,Sitapur. Respondent.
Hon'ble R. K. Agrawal, J.
Hon'ble Rajes Kumar, J.
The Income Tax Appellate Tribunal, Allahabad has referred the following question of law under section 256 (1) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") for opinion to this Court.
"Whether on the facts and in the circumstances of the case, the Tribunal was legally correct in canceling the penalty of Rs. one lac each imposed u/s 271-B of the Act, for the assessment years 1990-91 and 1991-92 by holding, inter alia, that no penalty under the said section is exigible for failure to furnish the audit report u/s 44 AB along with the return u/s 139 (1), if the same is furnished along with the return filed by the assessee u/s 139 (4) of the I.T. Act, 1961?"
The reference relates to the Assessment Years 1990-91 and 1991-92.
Briefly stated, the facts giving rise to the present reference are as follows.
The assessee is a registered firm. For the assessment years 1990-91 and 1991-92 returns were filed on 24.12.1990 and 13.02.1992 respectively. As the turnover of the assessee during the previous years relevant to the assessment years 1990-91 and 1991-92 exceeded forty lac rupees, a legal obligation rested upon the assessee to get its accounts audited before 31st October, 1990 for the assessment year 1990-91 and 31.10.1992 for the assessment year 1991-92 respectively. However, the respondent had filed return on 13th February,1992, penalty proceeding under section 271-B of the Act was initiated and the Assessing Authority imposed penalty of Rs. one lac for each of the two years. Respondent, feeling aggrieved, filed separate appeal before the Commissioner of Income Tax (Appeals). The Commission of Income Tax ( Appeals) has upheld the order of the penalty. Respondent filed second appeal before the Tribunal. Tribunal has deleted the penalty on the ground that the accounts were got audited before the specified date and since the return was filed under section 139 (4) and there was no failure to furnish the report along with the return in response to notice under section 142 (1) of the Act, no default has been committed by the respondent. The view taken by the Tribunal is in conformity with the decision of this Court in Commissioner of Income Tax Versus Jai Durga Construction Co. reported in (2000) 245 ITR, 857
The aforesaid decision has been subsequently followed in Income Tax Reference No. 19 of 1993 decided on 11th March, 2005, we do not finding any infirmity in the order of the Tribunal.
Respectfully following the aforesaid decision, we answer the question referred to us in the affirmative i.e. in favour of the assessee and against the revenue. However, there shall be no order as to costs.
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