Appeal granted, penalty canceled for late audit report filing citing health issues as valid reason.

The Tribunal allowed the appeal, setting aside the penalty imposed for late filing of the audit report under section 271B of the Income Tax Act. The Tribunal accepted the assessee's explanation of health issues causing the delay, supported by medical evidence, as a reasonable cause for the delay. Relying on Section 273B, the Tribunal concluded that no penalty should be imposed if a valid reason is established. Consequently, the penalty of Rs.1,50,000 imposed by the Assessing Officer and upheld by the CIT (A) was canceled, emphasizing the health issues as a reasonable cause for the delay.

---

---

Issues:
The appeal challenges the penalty imposed under section 271B of the Income Tax Act for late filing of audit report.

Summary:
The case involved an individual engaged in trading who filed a return of income declaring total income. The penalty proceedings were initiated due to the delayed filing of the audit report beyond the extended due date. The assessee explained the delay was due to health issues and argued that the audit report was available during scrutiny proceedings. Despite the explanations, the Assessing Officer imposed a penalty of Rs.1,50,000, which was upheld by the CIT (A).

Upon appeal, the Tribunal considered the arguments presented. The assessee cited health reasons as a reasonable cause for the delay, supported by medical evidence. Citing Section 273B of the Income Tax Act, the Tribunal found merit in the assessee's argument, stating that no penalty should be imposed if a reasonable cause is proven. As the health issues were substantiated, the Tribunal concluded that there was a valid reason for the delay in obtaining and filing the audit report.

Therefore, the Tribunal allowed the appeal, setting aside the penalty imposed by the Assessing Officer and confirmed by the CIT (A). The Tribunal directed the Assessing Officer to cancel the penalty, emphasizing the reasonable cause for the delay due to health issues.

The judgment was pronounced in the Open Court on 24th March, 2023.

---