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2023 (3) TMI 481 - AT - Income TaxPenalty u/s 271B - Non filing of audit report under section 44AB on time - HELD THAT - As there is no dispute that audit report was filed along with return of income under section 139(1) of the Act on 29.02.2016 and date of filing return under section 139(1) was 30.09.2015, the audit report was filed along with returned income. It is a matter of fact that Assessing Officer passed assessment order u/s 143(3) on 03.11.2017 in accepting the returned income of assessee. Hon'ble Madras High Court in the case of CIT vs. Apex Laboratories (P.) Ltd. . 2006 (1) TMI 90 - MADRAS HIGH COURT held when accounts were audited and the assessee got audit report but the same was filed along with returned income which was filed belatedly, penalty could not be imposed under section 271B of the Act. Therefore, direct the Assessing Officer to delete the penalty under section 271B. Also in CIT VS Jagat Rice Mills 2005 (3) TMI 824 - ALLAHABAD HIGH COURT by following its earlier decision in CIT Vs Jai Durga Construction 1999 (11) TMI 27 - ALLAHABAD HIGH COURT also held that penalty under section 271B was not leviable for delay in filing audit report as the assessee had got its accounts audited and obtained the audit report within the time allowed under section 139(1). Thus find that the ratios of the above decisions are squarely applicable on the facts of the present case. Appeal raised by assessee is allowed.
Issues Involved:
The appeal challenges the penalty imposed under section 271B of the Income Tax Act, 1961 for the assessment year 2015-16, arising from the failure to furnish an audit report under section 44AB before the due date of filing the return of income. Details of the Judgment: Issue 1: Imposition of Penalty under Section 271B The case involved a penalty imposed on the assessee for failing to furnish an audit report under section 44AB before the due date of filing the return of income. The Assessing Officer levied the penalty after noting that the total turnover of the assessee exceeded the specified limit and the audit report was not submitted on time. The assessee's explanation regarding the delay in filing the audit report was not accepted, leading to the imposition of a penalty. Issue 1 - Judgment: The NFAC/Ld. CIT(A) upheld the penalty under section 271B, citing precedents and legal provisions. The assessee's appeal before the Tribunal challenged this decision. Issue 2: Appeal and Submissions The assessee appealed against the penalty order, arguing that the delay in filing the audit report was unintentional and due to the earlier accountant leaving the job. The assessee contended that the audit report was eventually filed along with the return of income, and there was no loss to the revenue due to the delay. Issue 2 - Judgment: After hearing the submissions from both parties, the Tribunal considered the facts and legal arguments presented. The Tribunal referred to relevant case laws, including decisions from the Madras High Court and the Allahabad High Court, which supported the assessee's position. The Tribunal directed the Assessing Officer to delete the penalty under section 271B, citing the applicability of the legal precedents mentioned. Conclusion: The Tribunal allowed the appeal of the assessee, directing the deletion of the penalty imposed under section 271B. The decision was based on the assessee's explanation for the delay in filing the audit report and the legal principles established by the relevant case laws. The judgment emphasized the importance of considering the specific circumstances of each case when determining the applicability of penalties under tax laws.
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