The assessee, a partnership firm filed its return of income on 30th March, 2009. The tax Audit report was signed on 30th September 2008. The AO held that tax audit report should have been obtained before the specified date i.e. 30th September 2008. As the assessee had obtained the tax audit report on 30th September 2008 and not before 30th September, 2008, the AO, levied penalty of Rs. 1,00,000\/- u\/s 271B of the IT Act. Against this, assessee-preferred appeal before the CIT (A) who confirmed penalty holding that assessee has committed a default by not getting its accounts audited before the due date. On further appeal by the assessee HELD allowing the appeal: <\/p>\n
The term \u201cbefore\u201d specified date in section 44AB means \u201con or before\u201d the specified date. Therefore, though audit report is signed on 30th September 2008 and the requirement of law is to be construed as tax audit report required to be obtained on or before 30th September 2008. Hence, the assessee has obtained tax audit report in time and there is no default u\/s 271B. In Prem Chand Nathmal Kothari vs. Kishanlal Bachharaj Vyas & Ors dated 5th April 1975 reported in AIR 1976 Bombay 82 the Bombay High Court, relying on the Chambers Dictionary, held that word \u2018before\u2019 means \u2018previous to the expiration of\u2019. Therefore, before 30th September, 2008 means before the end of 30th September 2008. (Decision of Allahabad ITAT in Chandra Kumar Seth vs. ITO 62 ITD 106, CIT vs. Jai Durga construction Company 133 taxman 99 and CIT vs. V.P.Gupta and Sons 172 taxman 344 referred\/ followed)<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"
The term \u201cbefore\u201d specified date in section 44AB means \u201con or before\u201d the specified date. Therefore, though audit report is signed on 30th September 2008 and the requirement of law is to be construed as tax audit report required to be obtained on or before 30th September 2008. Hence, the assessee has obtained tax audit report in time and there is no default u\/s 271B. In Prem Chand Nathmal Kothari vs. Kishanlal Bachharaj Vyas & Ors dated 5th April 1975 reported in AIR 1976 Bombay 82 the Bombay High Court, relying on the Chambers Dictionary, held that word \u2018before\u2019 means \u2018previous to the expiration of\u2019. Therefore, before 30th September, 2008 means before the end of 30th September 2008<\/p>\n