COMMISSIONER OF INCOME-TAX v. KSHIPRA & CO.
Misc. Civil Case No. 428 of 1994, decided on July 29, 1999.
HIGH COURT OF MADHYA PRADESH : INDORE BENCH
S. K. Pavnekar, for the Revenue : L. P. Bhargava, for the Assessee
B. A. KHAN, J. :
Penalty was imposed on the assessee of Rs. 32,880 for asst. yr. 1985-86 and Rs. 1,00,000 for asst. yr. 1986-87 for not-filing the audit report. Assessee took appeal against this before CIT(A) and showed that audit report was filed and that requirement of filing the audit report was brought into force by Finance Act, 1988 from 1st April, 1989, and thus, was not attracted to the case. CIT(A) dismissed the appeal and assessee carried the matter to Tribunal which found on facts that assessee had submitted that audit report vide receipt No. 633898 dt. 21st March, 1990, thus, satisfying the requirement. It accordingly held levy of penalty illegal and also observed that the imposition of such penalty was otherwise barred by limitation under section 275.
2. Revenue seized the limitation issued and sought reference on this which was rejected by Tribunal noticing that imposition of penalty was otherwise not justifiable on facts because assessees had submitted the requisite audit report. But Revenue still filed this application for calling the reference from the Tribunal on the following questions, stated to be questions of law, for the opinion of this Court :
“Whether, on the facts and in the circumstances of the case, Tribunal was justified in law in deleting the penalty of Rs. 32,880 levied by AO under section 271B by holding that order levying the penalty is barred by limitation ?
Whether, on the facts and in the circumstances of the case, Tribunal was justified in law in deleting the penalty of Rs. 1,00,000 levied by AO under section 271B by holding that order levying the penalty is barred by limitation ?”
3. The fact of assessee having filed the audit report on 21st March, 1990 is borne by the record and is apparent on its face. It is strange that it should have been overlooked by AO and CIT(A). It is also sad that Revenue should have protracted this litigation for years on by catching hold of a non-issue of limitation in disregard to the crux of the matter viz., whether penalty was leviable for non-filing of audit report.
4. All this suggests that Revenue thrived on launching frivolous litigation at public cost. There is no dearth of cases which involve petty amounts and are dragged on in Courts for years. It serves interest of none. It is high-time that Revenue authorities indulged in self-introspection and realised the need for developing a “tax friendly” culture. It is hoped that they would change with the times and exercise due application of mind in contesting litigation against taxpayers.
5. This application is frivolous and is accordingly rejected.