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of <h1>Section 8 assessee registered under 12AA with low turnover not liable for audit under 44AB; 271B penalty deleted</h1> <h3>Vegetable & Fruit Promotion Council Keralam (VFPCK), Cochi Versus Asst. Commissioner of Income Tax, Ernakulam</h3> ITAT held that the assessee, being a section 8 company registered under section 12AA and not carrying on business with turnover below the threshold, was ... Levy of penalty u/s. 271B - Assessee is section 8 company - AO found that the assessee had not got the books of account audited as stipulated u/s. 44AB of the Act and failed to file the prescribed audit report on or before the specified date - HELD THAT:- Assessee is a company registered u/s. 8 of the Companies Act, 2013 enjoying registration under the provisions of section 12AA of the Act. Therefore, it cannot be said that the assessee company is carrying on any business and the turnover exceeded above Rs. 1 crore. Therefore, the provisions of section 44AB of the Act have no application to the facts of the present case. The lower authorities, without properly appreciating the facts of the case as well as spirit of provisions of section 44AB of the Act, had merely levied penalty which is contrary to the plain provisions of section 44AB of the Act. Therefore, we direct the AO to delete the penalty levied u/s. 271B of the Act. Appeal filed by the assessee stands allowed. Appeal against order of National Faceless Appeal Centre (CIT(A)) for AY 2016-17 concerning levy of penalty under section 271B for failure to get accounts audited under section 44AB. Assessee is a company incorporated under section 8 of the Companies Act, 2013 and registered under section 12AA of the Income Tax Act, formed for relief of poor, small and marginal farmers. AO levied penalty of Rs. 1,50,000 for non-filing of audit report; assessee did not respond to show-cause notice. CIT(A) confirmed the penalty 'without adverting to the statements of facts of the case.' Tribunal held the sole issue was whether levy of penalty u/s. 271B was justified and concluded that, since the assessee 'was not carrying on any business' and did not have turnover exceeding Rs. 1 crore, 'the provisions of section 44AB of the Act have no application to the facts of the present case.' Lower authorities' levy was deemed contrary to the plain provisions of section 44AB; direction given to delete the penalty of Rs. 1,50,000. Appeal allowed.
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