This tax appeal challenges a penalty for late audit report submission for fiscal year 1994-95. The High Court held that since the previous year’s audit was delayed due to impounded books, the ratio in Shri Swastik Steels applies, allowing the appeal and quashing the penalty.
Impugned judgment and order imposing penalty is quashed and set aside.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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Tax Appeal No.15/04
FARAD CONTINUATION SHEET NO.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
APPELLATE SIDE, BENCH AT AURANGABAD
TAX APPEAL NO.15 OF 2004
Office Notes, Office Memoranda of Coram, appearances, Court's orders or directions and Registrar's orders.
Court's or Judge's orders
Mr.S.P.Shah, advocate holding for Mr.P.V.Barde, advocate for the appellant. Mr.Alok Sharma, Standing counsel for Respondents.
CORAM : S.V.GANGAPURWALA & A.I.S.CHEEMA,JJ. Date : 24.03.2015.
PER COURT :
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Tax Appeal No.15/04
the Income Tax Act. The said penalty amount is paid by the appellant. Thereafter for the financial year 1994-95 the audit was completed in November 1996. For the same again a penalty of Rs.1,00,000/- is imposed U/s 271B of the Income Tax Act. The learned counsel submits that various reasons were given by the appellant, such as non-availability of the books of accounts, nonavailability of accountant, ailment, however, the same is not considered. The learned counsel further submits that unless the audit of the previous year was completed,the audit of the subsequent year could not have been undertaken. When penalty is already imposed for late submission of audit report for the preceding year, again for the next year the penalty could not have been imposed. Learned counsel relies on the judgment of the Division Bench of this Court in a case of “Shri Swastik Steels (P) Ltd., Vs. Assistant Commissioner of Income Tax” reported in (2003) 183 CTR (Bom.) 409.
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Tax Appeal No.15/04
Court in a case of “Commissioner of Income Tax Vs. J.L.Trivedi and Sons” reported in (1994) 210 ITR 112 (GUJ) and another judgment of the learned Single Judge of Allahabad High Court in a case of “Commissioner of Income Tax Vs. Hind Grain Suppliers” reported in (1988) 171 ITR 681.
“In the circumstances, we uphold the imposing of penalty of Rs.1 lac under S. 271B for the asst. year 1992-93. However, since
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Tax Appeal No.15/04
penalty is being imposed for 1992-93 at Rs.1 lac in the facts and circumstances of the case, there will be no penalty for delay in not obtaining the report in time for 1993-94 as the assessee could not have obtained the report for asst. yr. 1993-94 without completing the accounts for the earlier asst. yr. 1992-93.
Accordingly, we uphold the order of the Tribunal for asst. yr.1992-93 vide IT Appeal No.257 of 2001 imposing penalty of Rs.1 lac. However, for asst. yr. 1993-94, we set aside the order of the Tribunal, imposing penalty vide IT Appeal No.238 of 2001.”
(A.I.S.CHEEMA,J.) (S.V.GANGAPURWALA,J.)
Dt..24.03.2015. asp/office/Taxapp15.04
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2 issues framed by the court
Whether penalty for late submission of audit report can be imposed consecutively for two consecutive financial years when the audit of the first year could not be completed due to impounding of books
Whether the appellant has sufficient cause for the delay in submitting the audit report.
Colour shows how this judgement treated each authority
Shri Swastik Steels (P) Ltd. Vs. Assistant Commissioner of Income TaxFollowed¶7
(2003) 183 CTR (Bom.) 409
Commissioner of Income Tax Vs. J.L.Trivedi and SonsReferred¶18
(1994) 210 ITR 112 (GUJ)
Commissioner of Income Tax Vs. Hind Grain SuppliersReferred¶18
(1988) 171 ITR 681
2 provisions across 1 enactments
Farad
Respondents
S.V.GANGAPURWALA
A.I.S.CHEEMA
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
