Penalty under section 271B: authorities must consider timing of section 44AB validation before initiating proceedings.

Officers in the Gujarat High Court territorial jurisdiction should give due weight to the High Court's validation of section 44AB on 31 March 1986 when deciding whether to initiate proceedings under section 271B for assessment year 1985-86, and to apply the Board's prior guidance that discouraged penalty initiation where the prescribed audit report was obtained by the circular's specified date and self assessment tax paid within the normal filing period.

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