Failure to comply with audit requirements results in upheld penalty by Tribunal.

The Tribunal upheld the penalty imposed under section 271B by the AO, as confirmed by the Ld. CIT(A), due to the assessee's failure to comply with audit requirements, leading to the dismissal of the appeal.

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Issues:
1. Appeal against the Order dated 27.6.2018 of the Ld. CIT(A), Muzaffarnagar pertaining to assessment year 2010-11.
2. Confirmation of penalty u/s. 271B of the I.T. Act, 1961 by Ld. CIT(A) despite being time-barred.

Analysis:
1. The assessee firm derived income from civil contracting but failed to file the ITR within the prescribed time under section 139 of the Income Tax Act, 1961. The assessment was completed at an income of &8377; 4,40,600/- under sections 147/143(3) of the Act. The AO issued a show cause notice u/s. 271B for failure to get accounts audited under section 44AB. The Ld. CIT(A) partly allowed the appeal, adjusting the gross receipts and net profit. Subsequently, another show cause notice u/s. 271B was issued, leading to a penalty of &8377; 67,950/-. The assessee appealed against this penalty, which was dismissed by the Ld. CIT(A), prompting the appeal before the Tribunal.

2. During the hearing, the assessee contended that the penalty was time-barred as the audit was completed after the due date. The AO had kept the penalty proceedings in abeyance until the disposal of the appeal. The Tribunal noted that penalty under section 271B had to be imposed before the expiry of the financial year following the appellate order. As the penalty was imposed within the prescribed period, the AO's action was deemed valid. The assessee failed to provide a reasonable cause for the delayed audit. The Tribunal upheld the penalty, distinguishing the case law cited by the assessee.

3. The Tribunal found that the AO was justified in imposing the penalty under section 271B, as the assessee had failed to comply with the audit requirements of section 44AB. The Tribunal upheld the decision of the Ld. CIT(A) to confirm the penalty, stating that it was in accordance with the provisions of the Act and did not warrant interference. Consequently, the appeal of the assessee was dismissed.

In conclusion, the Tribunal upheld the penalty imposed under section 271B by the AO, as confirmed by the Ld. CIT(A), due to the assessee's failure to comply with audit requirements, leading to the dismissal of the appeal.

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