2011 (6) TMI 881 - AT - Income Tax

Summary

Issues involved:
The issue involves the levy and confirmation of penalty u/s 271B of the Income Tax Act, 1961.

Summary:

Issue 1: Penalty u/s 271B

The Assessing Officer initiated penalty proceedings u/s 271B as the assessee failed to get accounts audited within the specified time for the relevant Assessment Year. The assessee cited illness as the reason for the delay and submitted medical evidence. The Assessing Officer rejected the explanation and levied a penalty. The First Appellate Authority upheld the penalty. The assessee appealed against this decision.

Details:
The assessee was ill from 31st October, 2005 to 5th November, 2005, and got the audit completed on 8th November, 2005, filing the report on 16th November, 2005. The assessee provided medical evidence to support the illness claim. The Revenue Authorities did not consider the evidence sympathetically. The assessee argued that the delay was due to his health condition, constituting a reasonable cause for the delay in filing the audit report as required by law.

Judgment:
The Tribunal found that the assessee's illness was supported by documentary evidence, which was not refuted by the Revenue Authorities. Considering the circumstances and the evidence presented, the Tribunal concluded that the assessee had established a reasonable cause for the delay. Consequently, the penalty u/s 271B was canceled, and the appeal by the assessee was accepted.

Conclusion:
The Tribunal allowed the appeal filed by the assessee, canceling the penalty imposed under section 271B of the Income Tax Act, 1961.