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Penalty Overturned: Tribunal Finds Reasonable Cause for Delay in Filing Tax Audit Report, Relieves Assessee from Rs. 1.5L Penalty. The Tribunal allowed the appeal of the assessee, overturning the penalty of Rs. 1,50,000 imposed under section 271B of the Income Tax Act, 1961, for the ...
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Penalty Overturned: Tribunal Finds Reasonable Cause for Delay in Filing Tax Audit Report, Relieves Assessee from Rs. 1.5L Penalty.
The Tribunal allowed the appeal of the assessee, overturning the penalty of Rs. 1,50,000 imposed under section 271B of the Income Tax Act, 1961, for the Assessment Year 2013-14. The Tribunal found a reasonable cause for the delay in filing the Tax Audit Report, concluding that the penalty was not justified. Consequently, the penalty was vacated, and the assessee was relieved from the penalty obligation.
Issues: The judgment involves a penalty imposed under section 271B of the Income Tax Act, 1961 for Assessment Year 2013-14 due to the failure of the assessee to get the accounts audited under section 44AB of the Act within the stipulated time.
Summary:
1. The appeal was filed against the penalty of Rs. 1,50,000 imposed by the Assessing Officer under section 271B of the Income Tax Act, 1961 for Assessment Year 2013-14, which was confirmed by the Commissioner of Income Tax (Appeals).
2. The assessee, engaged in the business of trading and manufacturing of timber products and firewoods, e-filed the return declaring income, later revised, but failed to get the accounts audited under section 44AB of the Act, leading to penalty proceedings initiated by the Assessing Officer.
3. During the penalty proceedings, the assessee requested to keep the proceedings in abeyance till the disposal of the quantum first appeal pending before the CIT(A). The penalty was imposed by the Assessing Officer for non-compliance after the disposal of the quantum first appeal.
4. The appeal filed by the assessee was dismissed by the CIT(A), prompting the appeal before the Tribunal.
5. Despite being called for a physical hearing, no one attended for the assessee, and the appeal was decided after hearing the Senior DR.
6. The Tribunal considered the arguments and records, noting that the Tax Audit Report was filed with the revised return within the legally permissible time. The delay in furnishing the Audit Report was explained by the assessee due to personal reasons, which the Revenue disbelieved. The Tribunal found a reasonable cause for the delay and held that the penalty under section 271B was not justified, thus vacating the penalty.
Result: The appeal of the assessee is allowed, and the penalty under section 271B is not exigible.
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