2022 (9) TMI 582 - AT - Income Tax

Penalty levied u/s 271B - assessee has not filed the audit report of accounts in 3CB Form on or before the due date under section 139(1) - proof of reasonable cause for the delay in filing the tax audit report under section 44AB - submissions of the assessee that his accounts were audited by the auditor within the prescribed time and copy was furnished before the AO and the auditor informed him that he had been uploading the report in the income tax website every year thus under bonafide belief assessee believed auditor had been uploading the tax audit report - HELD THAT - On perusal of the orders of authorities below, we find that it is the case of the assessee that tax audit report under section 44AB of the Act was not filed before the due date of filing the same, but it was filed belatedly. Moreover, it is also not the case of the assessee that the accounts were not audited by the auditor within the prescribed time. The tax audit report was obtained well within the stipulated due date apart from mentioning of the same in the returns filed by the assessee. Considering the explanations that the assessee was prevented by reasonable cause for the delay in filing the tax audit report under section 44AB of the Act, we are of the considered opinion that the penalty levied u/s 271B is liable to be deleted. Accordingly, the penalty levied u/s 271B is deleted for both the assessment years. - Decided in favour of assessee.

Issues:
- Delay in filing appeals before the Tribunal challenging penalty under section 271B of the Income Tax Act, 1961.
- Imposition of penalty under section 271B for failure to comply with section 44AB requirements.
- Justification for condonation of delay in filing appeals.
- Submission of tax audit report within the prescribed time.
- Consideration of reasonable cause for delay in filing tax audit report.
- Decision on whether penalty under section 271B should be deleted.

Analysis:

1. Delay in filing appeals before the Tribunal:
The appeals filed by the assessee were delayed by three days in filing before the Tribunal. The assessee submitted petitions for condonation of delay, stating that the delay was not wilful or wanton. The delay was condoned after considering that the assessee was prevented by reasonable cause, and the appeals were admitted for adjudication.

2. Imposition of penalty under section 271B:
The Assessing Officer levied penalties under section 271B of the Act for both assessment years as the assessee failed to comply with section 44AB requirements. The ld. CIT(A) confirmed the penalties for both years. The case revolved around the non-filing of the tax audit report before the due date of filing the return of income under section 139(1) of the Act.

3. Justification for condonation of delay:
Despite various opportunities, no one appeared on behalf of the assessee during the proceedings. The Tribunal proceeded to decide the appeals on merits after hearing the ld. DR and considering the submissions made.

4. Submission of tax audit report within prescribed time:
The assessee claimed that the accounts were audited within the prescribed time, and the auditor had been uploading the report on the income tax website annually. However, the Assessing Officer still levied the penalty under section 271B.

5. Consideration of reasonable cause for delay in filing tax audit report:
The Department argued that the penalty was warranted as the tax audit report was not furnished before the due date. The assessee contended that the report was obtained within the stipulated time, and the delay in filing was due to a reasonable cause. It was noted that the accounts were audited on time, and the tax audit report was filed belatedly.

6. Decision on penalty under section 271B:
The Tribunal considered that the penalty under section 271B should be deleted as the assessee was prevented by reasonable cause for the delay in filing the tax audit report. Consequently, the penalty of &8377;1,50,000 under section 271B for both assessment years was deleted, and both appeals filed by the assessee were allowed.

This detailed analysis of the judgment highlights the key issues involved, the arguments presented by both parties, and the final decision reached by the Tribunal in relation to the penalty under section 271B of the Income Tax Act.

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