2023 (5) TMI 56 - AT - Income Tax

Government company wins appeal against penalty for delayed audit report filing

Puducherry Tourism Development Corporation Limited Versus The Income Tax Officer, CHE-C- (171) (1), Chennai.

Puducherry Tourism Development Corporation Limited Versus The Income Tax Officer, CHE-C- (171) (1), Chennai. - TMI Issues involved:The appeal challenges the penalty imposed under section 271B of the Income Tax Act for delayed filing of audit report under section 44AB of the Act.Summary:The appellant, a Government company, filed its income tax return for the assessment year 2018-19 declaring income at NIL. The case was selected for assessment due to non-filing of the audit report. The Assessing Officer completed the assessment at NIL income and initiated penalty proceedings under section 271B for delayed filing of the audit report. The penalty was confirmed by the CIT(A) (NFAC). The appellant argued that the appointment and acceptance of the Statutory Auditor were not within their control and the audit report was furnished during assessment proceedings. The Tribunal noted that the Tax Audit Report was available to the Assessing Officer before the completion of assessment proceedings, and thus, no penalty should be levied for a technical breach without mala fide intention.Precedent and Decision:The Tribunal cited a similar case where the penalty was deleted for a technical breach without mala fide intention. Following this precedent, the Tribunal held that it was not a fit case for the levy of penalty under section 271B, and accordingly, the penalty was deleted. The appeal was allowed, and the penalty levied was set aside.Conclusion:The Tribunal ruled in favor of the appellant, noting that the delay in filing the audit report was a technical breach without mala fide intention. Citing precedent, the penalty under section 271B was deleted. The appeal was allowed, and the penalty was overturned.