Penalty Order Quashed Due to Valid Health Reasons; Matter Remanded for Reconsideration Without Costs.

The court quashed the penalty order under Section 271B of the Income-tax Act, finding the conclusion of mala fide intent unsustainable. The petitioner's health reasons for late submission were deemed valid, and speculative findings were rejected. The matter was remanded to the Assessing Officer for reconsideration within two months, with no costs awarded.

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Issues:
Challenge to penalty under Section 271B of the Income-tax Act for late submission of audit report due to health reasons.

Analysis:
The petitioner, subject to audit under Section 44 AB, failed to submit the audit report on time due to health issues. The respondent imposed a penalty under Section 271 B. The petitioner argued that the delay was due to left-sided radiculitis, preventing coordination with the auditor. The respondent contended that the petitioner had a history of late submissions and could have uploaded the report by the deadline. The court noted the delay and the penalty provisions under Section 271B, which allows penalties for non-compliance unless for a reasonable cause under Section 273B.

The impugned order concluded that the delay in submitting the audit report was with mala fide intent to evade taxes. The court found this conclusion unsustainable as the gross income and tax liability were accepted by the Assessing Officer. The order also questioned the petitioner's health reasons, deeming them a fabrication. The court disagreed, noting the medical prescriptions provided. Speculative findings contrary to the facts led to the order's interference, quashing the order and remanding the matter for reconsideration by the Assessing Officer within two months, considering all material facts and provisions, including Section 273B.

In conclusion, the court found the penalty order unsustainable due to speculative findings and directed a reassessment by the Assessing Officer. The petitioner's health reasons and late submission were considered valid, leading to the quashing of the penalty. No costs were awarded, and the matter was remanded for a fresh decision within a specified timeframe.

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