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Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether penalty under section 271B of the Income-tax Act, 1961 was exigible when the assessee, being a company registered under section 8 of the Companies Act, 2013 and holding registration under section 12AA of the Income-tax Act, 1961, was not carrying on business so as to attract section 44AB of the Income-tax Act, 1961.
Analysis: The assessee's status as a section 8 company formed for charitable objectives and enjoying registration under section 12AA showed that it was not carrying on business in the sense contemplated by section 44AB. On that footing, the statutory audit requirement did not apply on the facts found, and the levy of penalty for alleged non-compliance with section 44AB could not be sustained.
Conclusion: The penalty under section 271B was held to be unsustainable and was directed to be deleted.
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