Appeal Dismissed: Tax Penalty for Late Filing Upheld

The Revenue's appeal against the penalty imposed under section 271B of the Income Tax Act for late filing of the tax audit report for the assessment year 2017-18 was dismissed by the Tribunal. The ld. CIT(A) (NFAC) had deleted the penalty considering the financial difficulties faced by the assessee, a decision upheld by the Tribunal due to the Revenue's failure to comply with procedural requirements. The Tribunal affirmed that it was not a suitable case for the penalty under section 271B, and the appeal was dismissed on January 24, 2023, in Chennai.

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Issues:
- Penalty under section 271B of the Income Tax Act for late filing of tax audit report.

Analysis:
The appeal was filed by the Revenue against the order of the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, regarding the penalty levied under section 271B of the Income Tax Act for late filing of the tax audit report. The case involved the assessment year 2017-18. The Assessing Officer initiated penalty proceedings as the audit report was filed beyond the due date. The total gross receipts of the assessee were above the threshold requiring a tax audit report under section 44AB of the Act. The penalty of Rs. 1,50,000 was levied under section 271B. The ld. CIT(A) (NFAC) deleted the penalty, citing reasons similar to a precedent case and considering the financial difficulties faced by the assessee. The Revenue appealed to the Tribunal, but the Department failed to comply with the defect notice for filing grounds of appeal. The Tribunal proceeded to hear the appeal on merits, where the ld. DR supported the penalty. However, as the assessee did not appear, the Tribunal upheld the decision of the ld. CIT(A) and dismissed the Revenue's appeal, affirming that it was not a fit case for the penalty under section 271B. The order was pronounced on January 24, 2023, at Chennai.

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