2026 (4) TMI 1549

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....019-20. 2. The assessee has raised the following grounds of appeal: "1.0 The learned Commissioner of Income Tax (Appeals), NFAC has erred in law and on facts in confirming the levy of penalty of Rs. 1,04,120/- under section 271B of the I T Act without properly appreciating the facts, circumstances, and reasonable cause submitted by the appellant. 1.1 The learned Commissioner of Income Tax (Appeals), NFAC failed to appreciate that the appellant was prevented by reasonable cause within the meaning of section 273b of the Act, as the failure to obtain the audit report was neither willful nor deliberate but occurred due to genuine reasons such as lack of professional guidance, illness/closure, or technical difficulties in e-....

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....ala fide intention and that in subsequent years, the assessee had appointed tax consultants and complied with statutory requirements. The assessee also pointed out that its accounts were subject to audit under the Co-operative Societies Act and it was under a bona fide belief that such audit was sufficient. The AO, however, rejected the explanation by holding that ignorance of law is not an excuse and that the statutory requirement of audit under section 44AB of the Act was mandatory once the turnover exceeded the prescribed limit. Accordingly, the AO levied penalty of Rs.1,01,420/- under section 271B of the Act. 5. Aggrieved, the assessee preferred an appeal before the CIT(Appeals) along with an application for condonation of delay of 1....

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....erations of the assessee society wherein the assessee was not equipped with proper professional guidance or infrastructure to comply with the requirements of tax audit under section 44AB. Secondly, it is also a matter of record that in the subsequent years the assessee has duly complied with the provisions of the Act by getting its accounts audited and filing returns of income, which demonstrates its bona fide intention to comply with the law once proper guidance was available. 9. Further, the case of the assessee falls squarely within the ambit of section 273B of the Act, which provides that no penalty shall be imposable if the assessee proves that there was a reasonable cause for the failure. In the present case, the explanation furnis....