By the Court.—We have heard Sri Shambhu Chopra for the Department and Sri Rakesh Kumar for the assessee.

2. The assessee, admittedly, did not get the accounts audited, as required by Section 44-AB of the Income Tax Act. Accordingly, a penalty was imposed under Section 271-B of the Act by the Assessing Officer. The penalty was confirmed by the CIT (Appeals), but has been set aside by the Tribunal on the ground that the cause shown by the assessee, for not getting the accounts audited, was ‘sufficient’.

3. Sri Chopra argued that there can be no legal justification for non-compliance of Section 44-AB, and therefore according to him the cause shown could not be said to be ‘sufficient’. No case law was cited. We are unable to subscribe to this extreme argument for the reasons spelt out below.

4. We have examined the Tribunal’s order. The Section 44-AB casts an obligation upon certain assessees to get their accounts audited. Non-fulfilment of this statutory obligation on the part of the assessee attracts a penalty under Section 271-B of the Act. Simultaneously, the statute, i.e. the Income Tax Act, also provides that where the non-fulfilment of this obligation is on account of ‘sufficient cause’, penalty will not be imposed.

5. This exception in the Statute, regarding sufficient cause, is not redundant. Therefore, it is obvious that though the non-fulfilment of the statutory obligation under Section 44-AB is a breach on the part of the assessee, but it is not every breach that will attract penalty. There would be cases where this non-fulfilment would not attract the penalty. These cases would be, where cause shown for non-fulfilment is ‘sufficient’. Whether the cause is sufficient or not depends upon the facts and circumstances. Therefore basically, whether the cause is or is not sufficient, would be a question of fact and not a question of law.

6. This appeal is, accordingly, dismissed.

————