The ITAT held that the assessee, being a company registered...

The ITAT held that the assessee, being a company registered under s. 8 of the Companies Act and enjoying registration under s. 12AA of the Act, was not engaged in carrying on business such that the turnover threshold under s. 44AB was exceeded; consequently the audit provisions under s. 44AB did not apply. The Tribunal found that the AO and lower authorities erred in mechanically imposing penalty under s. 271B for non-filing of the audit report, contrary to the plain language and intent of s. 44AB. The Tribunal set aside the penalty, directed deletion of the s. 271B levy, and allowed the assessee's appeal.