Penalty under Section 271B upheld for delayed audit report filing despite jurisdiction transfer argument

The HC upheld penalty u/s 271B for delayed filing of audit report u/s 44AB. The assessee argued that jurisdiction transfer from Bharatpur to Jaipur IT Department occurred without proper notice, preventing timely filing. However, the assessee failed to provide evidence of attempting to file returns at Bharatpur office and did not challenge the jurisdictional transfer. The assessee submitted to Jaipur jurisdiction by filing returns and appearing regularly before Dy. CIT, Central Circle-2, Jaipur. Without acceptable explanation or supporting evidence for the delay, the minimum penalty of Rs. 1 lakh was correctly imposed and sustained by the Tribunal.

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Issues Involved:
1. Justification of penalty under Section 271B of the IT Act.
2. Non-communication of changed jurisdiction under Section 127 of the IT Act as a reasonable cause for not imposing penalty.

Issue-wise Detailed Analysis:

1. Justification of penalty under Section 271B of the IT Act:

The appellant-assessee was penalized under Section 271B for failing to file the audit report by the specified date despite obtaining it on time. The Tribunal affirmed the AO's decision, dismissing the appeals and restoring the penalty. The Tribunal found no tangible evidence that the assessee attempted to file the audit report on time. The AO concluded that the assessee was aware of the centralized jurisdiction in August 1997 and failed to present any credible evidence to support their claim of attempting to file the audit report at Bharatpur. The penalty of Rs. 1 lac was imposed as the minimum prescribed under law.

2. Non-communication of changed jurisdiction under Section 127 of the IT Act as a reasonable cause for not imposing penalty:

The appellant-assessee argued that they were not informed about the change of jurisdiction from Bharatpur to Jaipur, which caused the delay in filing the audit report. The Tribunal rejected this argument, noting that no evidence was provided to support the claim that the return and audit report were presented on time at Bharatpur. The Tribunal also observed that the assessee did not challenge the jurisdiction change at the time and submitted to the jurisdiction of the Dy. CIT, Central Circle-2, Jaipur, by filing the return and audit report there. The Tribunal found that the assessee's claim of not being informed was not credible and upheld the penalty.

Conclusion:

The Tribunal upheld the penalty under Section 271B, finding no reasonable cause for the delay in filing the audit report. The assessee's argument of non-communication of jurisdiction change was rejected due to lack of evidence and the assessee's subsequent submission to the new jurisdiction. The appeals were dismissed, and the penalty was sustained.

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