2024 (11) TMI 1262 - AT - Income Tax

Revision u/s 263 - CIT directing AO to levy penalty u/s 271B - delay filling tax audit report - HELD THAT - It is a fact that tax audit report was furnished by the assessee before the Learned AO before the completion of assessment. Hence the tax audit report was indeed made available before the completion of assessment before the Learned AO. We hold that the tax audit report is only meant for providing guidance to the Learned AO to understand the various compliances made by the assessee under various provisions of the Act. Since the Tax Audit Report was indeed made available before the Learned AO by the assessee before the completion of assessment proceedings, the larger purpose of provisions of Section 44AB read with Section 139 of the Act stood complied with and there is no need to levy penalty under Section 271B of the Act We hold that this is not a fit case for levy of penalty u/s 271B - Hence, PCIT was not justified in invoking revision jurisdiction under Section 263 of the Act by directing the Learned AO to levy penalty under Section 271B of the Act. Assessee appeal allowed.

Summary

The ITAT Delhi allowed the appeal for AY 2018-19 as the PCIT was not justified in directing the AO to levy penalty under section 271B. The tax audit report was made available before the completion of assessment, fulfilling the requirements of the Act. The ITAT held that penalty under section 271B was not warranted. The decision was based on a similar case adjudicated by the Madras High Court. Other grounds raised by the assessee were left open as the relief was granted on the primary issue. The appeal of the assessee was allowed on 26/11/2024.