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TMI Blog2023 (9) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... issing the appeal of the appellant is erroneous in law, contrary to facts, and unjustified. 2. On the facts and in the circumstances of the case and in law, the Ld. Commissioner of Income tax (Appeals) NFAC has erred in levy of penalty u/s. 271B of the I.T. Act for the default in furnishing of Tax Audit Report. It ought to have been considered the fact that the Tax Audit Report is physically filed before the Assessing Officer during the course of assessment proceedings. 3. On the facts and in the circumstances of the case, the Ld. Commissioner of Income tax (Appeals) NFAC has erred in passing the penalty order under section 271B for default in furnishing the Tax Audit Report, ignoring the fact that, the Income tax Website has not admi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s. 271B dt. 07.01.2020. Accordingly, penalty show cause notices u/s. 274 r.w.s. 271B were issued to the assessee on 07.01.2020 and 19.05.2021. In response to said notice, assessee had made submission through 'e-Proceeding Response' on 31.05.2021. Though, the explanation furnished by the assessee was considered, however the same was not found to be tenable and acceptable by the Assessing Officer and hence, Assessing Officer had levied penalty u/s. 271 B of the Act for failure to comply with the provisions of section 44AB of the I.T. Act and directed the assessee to pay by way of penalty a sum of Rs. 84,316/- vide order under section 271B of the Income Tax Act, 1961, dated 11.01.2022. 4. Feeling aggrieved with the order of Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) Ld. AR had relied on the decision of Allahabad High Court mentioned at page 9 in para 4.1 of the assessment order, which is to the following effect : "4.1 In addition to the above arguments on facts the appellant relying on the decision of Hon'ble High Court of Allahabad in the case of CIT Vs. E.C.0 Project (P.) Ltd. in lTA No. 62 of 2000 dated July 25, 2014 that the notice issued by the AO for levy of penalty is invalid. The relevant portion relied upon finding in this case is extracted as under:- "11. In view of above, well settled legal position, we are of the view that in the instant case, no penalty is leviable under section 271B of the Act when AO failed to record its satisfaction in the assessment or der pertaining to it. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had relied upon the submission made by the assessee in the appellate proceedings and our attention was drawn to Para 4.1 to 4.7 of the submissions recorded in the order of the ld.CIT(A). 9. I have heard the rival submissions and perused the material on record. Undoubtedly, in the order passed by the Assessing Officer, there is no reference of the provision u/s 271B of the Act and penalty proceedings were initiated without recording the satisfaction by issuing show cause notice dt.07.01.2010. Moreover, the Assessing Officer, at the time of passing the assessment order, was in possession of the Audit Report which was duly mentioned by him in Para 4 of his order to the following effect: "......... It has been explained by the assessee that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the only requirement is to get the accounts of assessee audited or furnish the report of audit as required under section 44AB of the Act. There is no requirement either to file or supply at the time of filing of return of income. The only requirement is to get accounts audited. In the present case, the assessee had filed the proof of furnishing the audit report before Assessing Officer, which had not been disputed by the Assessing Officer in his order. 12. In the light of the above, the order of imposing the penalty / ld. CIT(A)'s order are without any basis as assessee had satisfactorily proved audit of accounts and report thereof. The above said is also supported by the reasoning given by the Hon'ble Supreme Court in the case of M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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