Penalty u/s 271B

[Guest]

An assessee got his accounts audited u/s44AF of the Income Tax Act, 1961 for assessment year 2007-2008 but could not file the income tax return.Whether penalty u/s 271B of the Act can be levied by tho ITO ?

[Surender Gupta]

Penalty under section 271B is applicable for Failure to get account audited u/s 44AB only. Sub section (5) of section 44AF refers to provisions of section 44AB. I believe that the issue is debatable and you may get favor at appropriate level and escape penalty.

AI Summary

Audit requirement applicability - penalty for failing statutory audit limited to audits under 44AB; applicability to 44AF contested. Where an assessee obtained an audit under the special presumptive audit provision but failed to file a return, the question arises whether penalty under 271B can be levied. The penalty regime is directed at failure to obtain audit under the general audit requirement in 44AB; sub section (5) of the special provision refers to that general provision. The applicability of the penalty when an audit under the special provision exists is debatable and may be contestable administratively.