ORDER
S. R. Chauhan, J.M.
1. This appeal by Revenue for asst. yr. 1993-94 is directed against the order of CIT(A), Jodhpur, dt. 19th September, 1994, whereby he cancelled the penalty levied by AO under s. 271B. The AO had levied the penalty holding that the assessee had not obtained audit report within specified time. The learned CIT(A) cancelled the penalty holding that IT return was filed late along with audit report and so the audit report was delayed as it could not be separated from the return and be filed without submission of return. He also observed that the chartered accountant had also confirmed in his statement/examination that he had prepared the audit report in time.
2. We have heard the arguments of both sides and also perused the record.
3. The learned Senior Departmental Representative of Revenue has also furnished written submission and we have gone through the same. We have also gone through the cited decisions, copies of which have been furnished before us.
4. The only issue raised by the Revenue before us disputes the cancellation of penalty imposed by AO under s. 271B. The learned Senior Departmental Representative has contended that the assessee’s turnover being more than Rs. 40 lacs it was necessary for the assessee to have its accounts audited under s. 44AB before the specified date which, in this case, is 31st October, 1993. He has contended that it was also necessary for the assessee to obtain audit report under s. 44AB on or before the specified date, i.e., 31st October, 1993; and equally it was also necessary for the assessee to furnish report of audit under s. 44AB on or before 31st October, 1993. He has contended that such a requirement already existed under s. 44AB r/w s. 271B and s. 139(6A), as they stood at the relevant time. He has also referred to the decision of Hon’ble Rajasthan High Court in the case of Abhay Kumar & Co. vs. Union of India & Ors. (1987) 164 ITR 148 (Raj). As against this, the learned authorised representative of assessee has contended that the issue is covered by a decision of this Bench, dt. 4th May, 2000, in ITA No. 247 (Jp) of 1994 in the case of Asstt. CIT vs. Shanker Lal Agarwal, a copy of which has been placed on record. However, as the learned Senior Departmental Representative contended that the decision of Hon’ble jurisdictional High Court in the case of Abhay Kumar was not considered by the Bench in its earlier decision, so the arguments of both sides were heard in detail. The learned authorised representative of assessee has contended that various Benches of Tribunal have been consistently holding that for the assessment years prior to 1st July, 1995, the furnishing of audit report under s. 44AB was not necessary nor, in turn, the penalty under s. 271B was leviable for default of non-furnishing of the same. He has contended that the requirement of furnishing of audit report under s. 44AB has come in the statute s. 44AB w.e.f. 1st July, 1995, and prior thereto the only requirement under s. 44AB was regarding getting the accounts audited and obtaining the report of the said audit. He has contended that for assessment years prior to the amendment in s. 44AB which has come into operation w.e.f. 1st July, 1995, no penalty under s. 271B can be levied for any failure to furnish the report of audit under s. 44AB or for any delayed furnishing of the audit report. He has cited V. Kathirvel vs. ITO (1999) 63 TTJ (Mad) 500. He has contended that while interpreting taxing statutes the Court cannot make good the deficiencies in the statute and that Court must interpret the statute as it stands and in case of doubt in a member favourable to the taxpayers. He has cited CIT vs. Shaan Finance (P) Ltd. (1998) 231 ITR 308 (SC).
5. We have considered the rival contentions as also the materials placed on record together with the cited decisions. We may note that in s. 44AB the word “furnish” regarding audit report under s. 44AB has been inserted w.e.f. 1st July, 1995, and that earlier thereto the words in s. 44AB were “to obtain”. As such so far as the provision of s. 44AB is concerned, it did not provide for furnishing of audit report under s. 44AB at any time prior to 1st July, 1995. The assessment year under appeal being 1993-94, that is, prior to amendment of s. 44AB vide the Finance Act, 1995, which became operative w.e.f. 1st July, 1995, the position of law under s. 44AB remains that as mentioned above as being prior to 1st July, 1995. Accordingly, evident as it is, the provision of s. 44AB, as it stood prior to 1st July, 1995, required only the getting of accounts audited within the specified date and also the obtaining of audit report under s. 44AB within the specified date. Furnishing of audit report under s. 44AB was not a requirement under s. 44AB prior to 1st July, 1995, and the said requirement has come under s. 44AB only w.e.f. 1st July, 1995, which did not exist prior thereto, nor, in turn, in asst. yr. 1993-94, the one under appeal. As such during asst. yr. 1993-94 the provision of s. 44AB, as it stood at the relevant time, did not require the assessee to furnish the audit report under s. 44AB.
6. Now coming to the provision of s. 139(6A) the same may, for advantage, be quoted here as under :
“139(6A) Return of Income : Without prejudice to the provision of sub-s. (6), the prescribed form of the returns referred to in this section and in cl. (i) of sub-s. (1) of s. 142 shall in the case of an assessee engaged in any business or profession also require him to furnish the report of any audit referred to in s. 44AB ……….”
7. In the above provision the words “the report of any audit” were inserted in this provision by amendment vide Finance Act, 1988, w.e.f. 1st April, 1989, and the words “referred to in s. 44AB” were inserted by amendment vide Finance Act, 1995, w.e.f. 1st July, 1995. It may be recalled that the audit reports may be under various provisions of IT Act, 1961, as for example ss. 12A(b), 32AB(5), 80HH, 80HHC, 80HHE, etc. etc. So the provision of s. 139(6A) as amended by the Finance Act, 1988, w.e.f. 1st April, 1989, as it existed prior to 1st July, 1995, required only the furnishing of audit report along with return and the said audit report was not the only one under s. 44AB but there were so many other audit reports also under various sections, a few of which have just been mentioned above. As such the said provision (as it stood prior to 1st July, 1995, required the various audit reports to be furnished to the AO along with the return of income and the provision did not prescribe any earlier specific date for furnishing the audit report. We may also note that in case the audit report was not furnished along with the return of income as required under s. 139(6A) the return was to be treated as defective and the AO was under an obligation under s. 139(9) to require the assessee to rectify the defect and thus provide the assessee an opportunity for removing the defect. However, if the assessee did not rectify the defect even after affording the assessee an opportunity, the result would have been that the return would be treated as an invalid return. In the instant case, however, there is no material on record to show that the AO had given any notice of defect in the return to the assessee requiring the assessee to remove the defect of non-furnishing of the audit report with the return. As such even if there were non-compliance of s. 139(6A) due to non-furnishing of audit report under s. 44AB along with the return, the penalty under s. 271B cannot justifiably be levied for the said default/defect or else the same would violate the principle of natural justice, inasmuch as no notice under s. 139(9) for rectifying the defect in return seems to have been given.
8. Besides, the issue is worth considering from another aspect as well. Assuming that even if the defect notice under s. 139(9) for rectifying the defect in the return in respect of non-filing of the audit report along with the return of income as required under s. 139(6A) were issued and still there were non-compliance on the part of the assessee inasmuch as the assessee did not rectify the defect nor did the assessee file the audit report, the leviability of penalty under s. 271B for the aforesaid default of s. 139(6A) still remains question marked for the reason that the penalty under s. 271B is leviable in some specific situations. In order to appreciate the same we may quote the relevant portion of s. 271B, as applicable prior to 1st July, 1995, as under :
“obtain a report of such audit as required under s. 44AB or furnish the said report along with return of his income filed under sub-s. (1) of s. 139 or along with the return of income furnished in response to notice under cl. (i) of sub-s. (1) of s. 142.”
9. A perusal of the above provision makes it clear that the penalty thereunder is leviable for the following defaults :
(i) failure to obtain report of audit under s. 44AB;
(ii) failure to file report of audit under s. 44AB along with return of income which is filed under s. 139(1); and
(iii) failure to file report of audit under s. 44AB with the return of income which is filed in response to notice under s. 142(1)(i).
10. As such it is clear from the above analysis that under s. 271B as it stood prior to 1st July, 1995, the penalty leviable was for default of obtaining audit report under s. 44AB or for filing of audit report along with return of income when return was furnished either under s. 139(1) or in compliance of notice under s. 142(1)(i). No penalty under the above provision was however, leviable when the return of income was filed under s. 139(4). This view is also supported by V. Kathirval vs. ITO (supra) cited by the learned authorised representative of assessee.
11. We may also note that the penalty provided under s. 271B does not embrace, within its fold, the default of any requirement regarding furnishing of audit report under some other provisions of the Act. For drawing this conclusion we may lay emphasis on the words of s. 271B as used in the portion thereof quoted hereunder :
“report of such audit as required under s. 44AB”
12. The resultant position, that emerges logically, is that the default of requirement under s. 139(6A) does not seem to attract the mischief of s. 271B when the return was filed under s. 139(4). The non-compliance of s. 139(6A) may, however, attract the penalty under s. 271B, for non-furnishing of the audit report under s. 44AB only in situation specified in s. 271B as mentioned at items (ii) and (iii) above, and in no other situation. In this context we may also note that in s. 139(6A) the words “referred to in s. 44AB” qualifying the audit report have been inserted by amendment vide Finance Act, 1995, w.e.f. 1st July, 1995. The reference of s. 44AB in respect of audit report did not exist in s. 139(6A) of the Act prior to 1st July, 1995.
13. In the instant case there is no default regarding the situation mentioned at item No. (iii) above as is evident from the written submission of the assessee (p 4 of the assessee’s Paper Book) wherein it is mentioned that the AO had issued notice under s. 142(1), dt. 7th December, 1993, requiring to file return of income on or before 31st December, 1993, and the assessee filed the return along with audit report under s. 44AB on 14th December, 1993, that is prior to the date given by AO. As regards the situation mentioned at item No. (ii) above the return filed by the assessee is a belated one inasmuch as the due date was 31st October, 1993, whereas the assessee filed on 14th December, 1993. As such it was not a return filed under s. 139(1) but one filed under s. 139(4). Therefore, the requirement ordained in s. 271B vide situation mentioned at item No. (ii) above is not applicable to the matter in hand.
14. As regards the situation mentioned at item (i) above we will discuss the same ahead separately as the same involves some other disputes also requiring factual analysis.
15. It is clear from the above discussion that s. 271B, as it stood at the relevant time, did not require the assessee to furnish the report of audit under s. 44AB along with return of income inasmuch as the assessee’s return of income was not filed under s. 139(1) but was filed under s. 139(4). At this juncture it may also be observed that the words “referred to in s. 44AB” qualifying the audit report have been inserted in s. 139(6A) by Finance Act, 1995 w.e.f. 1st July, 1995, only and the assessment year under appeal being 1993-94, the penalty under s. 271B is not leviable for non-compliance of s. 139(6A).
16. Now coming to the provision of s. 271B, the position of the said provision as it stood prior to 1st July, 1995, alone is relevant in this case and the same has already been discussed above. It is worthwhile to note here that requirement of “furnishing” the audit report under s. 44AB was incorporated in s. 271B by amendment vide Finance Act, 1995, w.e.f. 1st July, 1995, and prior thereto such a general requirement of furnishing the report of audit under s. 44AB was no more there under s. 271B.
17. The learned Senior Departmental Representative has referred to the decision of Hon’ble jurisdictional High Court in Abhay Kumar & Co. vs. Union of India (supra). He has drawn our attention to the observation of the Hon’ble Court as made on p. 165 of the report which is as under :
“The conspectus of the whole situation is that both the provisions, i.e., s. 44AB along with s. 271B and s. 139(9) can be read together and a harmonious construction is that the assessee has to file an audit report within the specified date, failing which he will have to pay the penalty if he fails to show reasonable cause for not doing so.”
18. From the perusal of the cited judgment we find that the issue of penalty was not there before the Hon’ble High Court and it was the constitutional validity of s. 44AB which was in issue before the Hon’ble Court. It was with a view to judge the constitutional validity of s. 44AB that the workability of s. 44AB together with s. 139(9)(e) and s. 271B together was considered and the observation on harmonious construction were made as quoted above. In this context we may also refer the observation made in the second para on p. 164 of the report to the effect that :
“The next limb of the argument of learned counsel for the petitioner is that the present section is unworkable because it is inconsistent with the various other provisions of the Act.”
19. In this regard the contention raised was that there was no discretion with the AO under s. 271B for levy of penalty for violation of s. 44AB, whereas under s. 139(2) there was discretion with the ITO. From the perusal of the cited judgment it clearly appears that the observations made by the Hon’ble High Court regarding the levy of penalty on p. 165 of the report were in the context of judging the workability of s. 44AB together with s. 271B so as to adjudicate upon the issue of constitutional validity of s. 44AB. Obvious as it is the question as to whether the penalty under s. 271B was or was not leviable for default of furnishing of audit report required under s. 44AB within specified date was not in issue before the Hon’ble High Court. In the circumstances the above referred observations of the Hon’ble High Court as made on p. 165 of the reported judgment may not be the ratio decidendi of the case but only obiter dicta as has been argued by the learned authorised representative of the assessee. The contention of the learned authorised representative of the assessee has further been that the obiter dicta of the Hon’ble apex Court of the land may have the binding nature and be operative as precedent but not the obiter dicta of an Hon’ble High Court and this contention cannot be said to be without force. It has been held by the Hon’ble Calcutta High Court in the case of Mahaliram Ramjeedas, In re. (1938) 6 ITR 265 (Cal) that the obliter dicta of High Court did not operate as res judicata nor was it binding on IT authorities. In Goodyear India Ltd. vs. State of Haryana (1991) 188 ITR 402 (SC) the Hon’ble Supreme Court has held that a judgment is an authority only for what it decides and not for what may remotely or even logically follow. It has also been held therein that a decision even on question not argued cannot be treated as precedent. In CIT vs. Sun Engineering Works (P). Ltd. (1992) 198 ITR 297 (SC) the Hon’ble Supreme Court has held that the judgment must be read as a whole. The observations from the judgment are to be considered in the light of question before the Court and not to be divorced from the context of the question under consideration. It has also been held that a decision of the Hon’ble Supreme Court takes its colour from the question involved in the case in which it is rendered. In CIT vs. K. Ramakrishnan (1993) 202 ITR 297 (Ker) the Hon’ble Kerala High Court has held that a case is a precedent for what it explicitly decides and nothing more. The words used by the Judges are not to be read as if they are words used in an Act of Parliament. These words are not used after weighing the pros and cons of all conceivable situations that may arise. They constitute just the reasoning of the Judges in the particular case, tailored to a given set of facts and circumstances. What is made relevant and binding is only the ratio decidendi and no more. In Abhay Kumar case (supra) the specific issue as to whether the penalty under s. 271B be levied or not for not furnishing of the audit report under s. 44AB within the specified date, as provided in Expln. (ii) of s. 44AB was not there for adjudication before the Hon’ble Rajasthan High Court and the specific issue before the Hon’ble Court was regarding the constitutional validity of s. 44AB. There is no gainsaying the fact that the considerations for judging the constitutional validity of a statutory provision are different from those for judging the leviability of penalty under a particular statutory provision. The settled legal position is that while the Courts are slow in declaring a provision constitutionally invalid, that is, they need preferably be liberal in upholding the validity of provision whereas they need preferably construe the penalty provision strictly. At the same time it is also settled position of law that in interpreting a fiscal statute the Court cannot make good the deficiencies if there be any. The Court must interpret the statute as it stands and in case of doubt in a manner favourable to the tax payers. This position has been laid down by the Hon’ble Supreme Court in (1998) 231 ITR 308 (supra), cited by the learned authorised representative of the assessee. In that view of the matter we are of the considered opinion that in the circumstances the Revenue does not get any benefit from the decision of Hon’ble jurisdictional High Court in the case of Abhey Kumar (supra). In view of the discussions made above, we are of the view that prior to amendment of ss. 271B and 44AB vide Finance Act, 1995, w.e.f. 1st July, 1995, penalty for non-furnishing of audit report required under s. 44AB within specified date was not leviable. As such the assessment year under appeal being 1993-94 the penalty under s. 271B for non-furnishing of audit report under s. 44AB on or before 31st October, 1993, the specified date, was not leviable on assessee.
20. However, the AO has, in his order, largely discussed the non-getting of the accounts audited within the specified date (31st October, 1993) as also non-obtaining of the report of such audit under s. 44AB within 31st October, 1993, though the learned CIT(A), in his order, discussed only the non-furnishing of the audit report under s. 44AB. From the perusal of the record we find that the AO has drawn his conclusion regarding the assessee having not got its accounts audited under s. 44AB by 31st October, 1993, nor having the audit report under s. 44AB obtained by 31st October, 1993, on the basis of the fact that the audit report was furnished along with return as late as 14th December, 1993, despite the fact that the assessee had been penalised for the similar default in the preceding year vide order of penalty under s. 271B dt. 3rd March, 1993. In our view there can be a number of reasons for not furnishing of the audit report prior to 14th December, 1993, after having obtained the same on 28th October, 1993. The preparing of the audit report, by 28th October, 1993, is supported by the statement of chartered accountant also as mentioned in the impugned order of the learned CIT(A). Mere delay that has occurred in this case, in furnishing the audit report to AO or for that matter, mere suspicion cannot constitute a basis for concluding that the accounts were not got audited by 31st October, 1993, or the report of the said audit was not obtained by 31st October, 1993, the specified date under s. 44AB. As such there being no cogent and clear evidence to shatter the apparent fact-situation the same well deserves to be treated as real. Considering the facts and circumstances of the case, we do not find it established that the audit report dt. 28th October, 1993, was not prepared or not obtained by 28th October, 1993. In the circumstances the assessee having got its accounts audited by 28th October, 1993, and having obtained a report of the said audit by 28th October, 1993, the penalty for default of getting the accounts audited within specified date under s. 44AB and of obtaining the audit report within the said specified date is not found to be leviable under s. 271B. In that view of the matter considering all the facts and circumstances of the case as also the legal position we find the conclusion of the learned CIT(A) drawn in his impugned order to be quite justified and warranting no interference. We, therefore, decline to interfere with the same.
21. In the result, this appeal of Revenue is dismissed.