2023 (5) TMI 56 - AT - Income Tax

Penalty levied u/s 271B - assessee has not filed the tax audit report within due date - Assessee assigning reasons for the delay that the appointment of Statutory Auditor was not in the control of the assessee and the C AG has appointed the Statutory Auditor on 10.08.2017 and the Statutory Auditor accepted the audit by 27.03.2019 - HELD THAT - Considering submissions that the audit report under section 44AB of the Act were furnished during the course of assessment proceedings under section 143(3) of the Act, which was also considered by the Assessing Officer before concluding the assessment, thus, we are of the considered opinion that when the Tax Audit Report was made available to the Assessing Officer before completion of assessment proceedings, then for venial technical breach without any mala fide intention, penalty cannot be levied under section 271B of the Act. See case of Balaji Logistics 2022 (9) TMI 1432 - ITAT CHENNAI Thus it is not a fit case for the levy of penalty under section 271B of the Act and accordingly, the penalty levied stands deleted. Decided in favour of assessee.

Summary

Issues involved:
The appeal challenges the penalty imposed under section 271B of the Income Tax Act for delayed filing of audit report under section 44AB of the Act.

Summary:
The appellant, a Government company, filed its income tax return for the assessment year 2018-19 declaring income at NIL. The case was selected for assessment due to non-filing of the audit report. The Assessing Officer completed the assessment at NIL income and initiated penalty proceedings under section 271B for delayed filing of the audit report. The penalty was confirmed by the CIT(A) (NFAC). The appellant argued that the appointment and acceptance of the Statutory Auditor were not within their control and the audit report was furnished during assessment proceedings. The Tribunal noted that the Tax Audit Report was available to the Assessing Officer before the completion of assessment proceedings, and thus, no penalty should be levied for a technical breach without mala fide intention.

Precedent and Decision:
The Tribunal cited a similar case where the penalty was deleted for a technical breach without mala fide intention. Following this precedent, the Tribunal held that it was not a fit case for the levy of penalty under section 271B, and accordingly, the penalty was deleted. The appeal was allowed, and the penalty levied was set aside.

Conclusion:
The Tribunal ruled in favor of the appellant, noting that the delay in filing the audit report was a technical breach without mala fide intention. Citing precedent, the penalty under section 271B was deleted. The appeal was allowed, and the penalty was overturned.