Judgment CHANDRAMAULI KR.PRASAD and RAVI RANJAN JJ. 1. The assessee is a Government Company. Its total receipt relevant for the assessment year 1992-93 is Rs. 3,00,07,432/-. It filed its return on 29.12.1992 declaring loss of Rs. 49,61,620/-. Alongwith the return, the assessee did not tile audited account as provided under Section 44AB of the Income Tax Act. The Assessing Officer imposed penalty of Rs. 1,00,000/- under Section 271B of the Income Tax Act. Assessees appeal before the Commissioner of Income Tax (Appeals), failed, so also the Second Appeal filed before the Income Tax Tribunal. The assessee thereafter, has filed the present appeal and same has been admitted for hearing by order dated 21.11.2000 on the following substantial question of law.- (a) Whether on the facts and in the circumstances of the appellants case, Income-tax Appellate Tribunal is justified in confirming penalty of Rs. 1,00,000/- imposed under Section 271B of the Income-Tax Act? (b) Whether on the facts and in the circumstances of the appellants case, the Income-tax Appellate Tribunal is correct in law in holding that explanation of the appellant with regard to not getting the accounts audited within specified date/time is unreasonable? 2. In order to appreciate the submission of Mr. Rastogi, appearing on behalf of the assessee, we deem it expedient to give a look to the scheme of the income-Tax Act. 3. Section 44AB of the Income-Tax Act, inter alia, provides that if total sales, turnover or gross receipts, as the case may be, in business exceeds forty lakh rupees in any previous year, it is to be audited by an accountant before the specified date. 4. Section 619(2) of the Companies Act, inter alia, provides that the Auditor of a Government Company, shall be appointed or reappointed by the Comptroller and Auditor General of India. 5. Section 271B of the Income-Tax Act, hereinafter referred to as the Act, inter alia, provides that if an assessee faith to furnish report of such audit as required under Section 44AB of the Act, the Assessing Officer may direct such assessee to pay by way of penalty a specified percentage of total sales, turnover or the gross receipts or a sum of 1,00,000/- rupees, whichever is less. 6. 6. Section 273B of the Act, inter alia, provides that notwithstanding the provision of Section 271B of the Act, no penalty shall be imposed if the assessee proves that there was reasonable cause for the said failure. 7. There is no dispute in the present appeal that the turnover of the assessee obliged audit of account by an auditor under Section 44AB of the Act. It is further not in dispute that the account was not audited as required under Section 44AB of the Act within the specified period. In view of aforesaid, the assessee had exposed itself for the levy of penalty under Section 271B of the Act. 8. The only submission of the assessee is that although the account was not audited as provided under Section 44AB of the Act, but it being not responsible for the delay, levy of penalty is illegal. 9. The Assessing Officer, the Commissioner of Income-Tax Appeal and the Income-Tax Tribunal have concurrently held that the delay has not been explained and the cause shown by it, is not reasonable and, therefore, the levy of penalty is legal and valid. 10. Mr. Rastogi, appearing on behalf of the assessee, submits that it had filed its return on 29.12.1992, which shows the assessees bona fide. He submits that it was obligation of the Comptroller and Auditor General of India to appoint auditor under Section 619(2) of the Companies Act and when it did not appoint the auditor, fault does not lie with the assessee. He submits that the assessee cannot be penalized for an act over which it has no control. According to him, the contumacious and dishonest act is necessary to invite penalty. In support of the submission, reliance has been placed on a decision of the Punjab & Haryana High Court in the case of Commissioner of Income-Tax V/s. Mathana Model Co-operative Credit and Service Society Ltd., 299 ITR 70, the decision of the Supreme Court in the case of Hindustan Steel Ltd. V/s. State of Orissa, 83 ITR 26, the decision of the Delhi High Court in the case of Azadi Bachao Andolan V/s. Union of India 252 ITR 471 and the decision of the Madhya Pradesh High Court in the case of Biaora Constructions P. Ltd. V/s. Commissioner of Income-Tax and Another, 287 ITR 112. 11. Mr. 11. Mr. Harshwardhan Prasad, Senior Standing Counsel, appearing on behalf of the Revenue, however, centends that on appreciation of the materials, the tax authorities as also the Tribunal had held that the explanation furnished by the assessee is not reasonable and as such, the imposition of penalty is lawful and valid. 12. Having appreciated the rival submission, we do not have the slightest hesitation in accepting the broad submission of Mr. Rastogi that in case the assessee furnishes cause which is reasonable for non-compliance of the provisions of Section 44AB of the Act, it shall not be required to pay penalty. Whether a particular cause shown by the assessee is reasonable cause or not, is primarily a question of fact. However, in a case in which the conclusion arrived at by the authority is perverse and based on no material, same gives rise to a substantial question of law and shall be subject to appeal before this Court. 13. In view of aforesaid, we do not deem it expedient to refer to the individual cases relied on by Mr. Rastogi. 14. It is, worth-mentioning here that the assessees only plea is that the Comptroller and Auditor General of India had failed to appoint the auditor, hence assessee cannot be said to be responsible and the cause shown for not getting the accounts audited within specified time is reasonable. There is nothing on the record to show that the assessee had informed the Comptroller and Auditor General of India that it had completed the books of accounts and to appoint the auditor. From perusal of the order of the Tribunal, it appears that opportunity was given to the assessee to produce evidence to show that it had completed the books of account and informed the Comptroller and Auditor General of India about the same and despite that the Comptroller and Auditor General of India had failed to appoint the statutory auditor. Nothing was brought on record to show that Securing appointment of the Auditor through the Comptroller and Auditor General of India, is the responsibility of the assessee which it had failed and cause shown for delay being not reasonable, condoning the assessees default in such circumstance, in our opinion, would amount to subverting the law. 15. In view of the discussions aforesaid, answers to all the questions are in the affirmative, against the assessee and in favour of the Revenue. 15. In view of the discussions aforesaid, answers to all the questions are in the affirmative, against the assessee and in favour of the Revenue. We are of the opinion that in the facts and circumstances of the case, the Income-Tax Tribunal was justified in confirming the penalty under Section 271B of the Income-Tax Act. We are further of the opinion that the Income-Tax Tribunal is correct in law in holding that explanation of the assessee is unreasonable and delay in getting the books of account audited is attributable to the assessee. 16. in the result, we do not find any merit in the appeal and it is dismissed accordingly but without any order as to cost.