2016 (4) TMI 343 - AT - Income Tax

Penalty U/s 271B - Failure to get accounts audited - Held that - There is no evidence with the assessee to prove that he got account audited on 14/7/2008 by M/s Vimal Geol & Associates. Now law has been amended and not only the assessee got the account audited but audit report is to be submitted before due date in the office of the Assessing Officer. The assessee s plea is that he has totally dependent on AR for submitting the return as well as audit report but this averment also has not been proved by him with cogent evidence. Therefore, we find that the ld CIT(A) was justified in confirming the penalty U/s 271(B) of the Act. Accordingly, we uphold the order of the ld CIT(A). - Decided against assessee.

Summary

Issues:
- Appeal against penalty under Section 271B of the Income Tax Act, 1961
- Compliance with Section 44AB requirements for audit report submission

Analysis:
1. The appellant appealed against the penalty imposed under Section 271B of the Income Tax Act, 1961, for filing a belated return for A.Y. 2008-09. The Assessing Officer found that the appellant's total receipts/sales in F.Y. 2007-08 exceeded the threshold requiring audit under Section 44AB, which the appellant failed to comply with. Despite multiple opportunities, the appellant did not provide evidence of timely audit report submission. The Assessing Officer imposed a penalty of Rs. 1 lac under Section 271B.

2. The appellant contended before the CIT(A) that the responsibility for filing the audit report and return lay with the authorized representative, who failed to do so in time. The appellant cited reasons such as dependence on the representative, involvement in anti-corruption proceedings, and alleged illegal gratification as causes for the delay. However, the CIT(A) upheld the penalty, noting the lack of evidence supporting the appellant's claims.

3. In the appeal before the ITAT, the appellant reiterated the arguments made before the CIT(A), emphasizing the reliance on the authorized representative for compliance. The appellant claimed that the audit report was prepared on time but not submitted due to the representative's failure. The ITAT, after considering both parties' contentions, upheld the CIT(A)'s decision, stating that the appellant failed to provide sufficient evidence of timely audit report submission, thereby justifying the penalty under Section 271B.

4. The ITAT highlighted that the appellant's dependence on the authorized representative was not substantiated with concrete evidence, and the requirement to submit the audit report before the due date remained unfulfilled. The ITAT referred to the amended law mandating timely submission of the audit report to the Assessing Officer. Consequently, the ITAT affirmed the CIT(A)'s decision to uphold the penalty under Section 271B.

5. Ultimately, the ITAT dismissed the appellant's appeal, confirming the penalty imposed under Section 271B of the Income Tax Act, 1961. The decision was based on the lack of evidence supporting the appellant's claims regarding timely audit report submission and the failure to meet the statutory requirements outlined in Section 44AB.