TaxTMI 
TaxTMI 
2026 (7) TMI 1323
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..... The order of CIT(A)-NFAC arises out of the order of the AO imposing penalty u/s. 271B of the Act amounting to Rs. 1,50,000/-. The relevant Assessment Year is 2020-21. 2. Brief facts of the case are as follows: The assessee is an individual. For the assessment year 2020-21, the assessee filed her return of income belatedly u/s. 139(4) of the Act on 09.02.2021. Subsequently, she filed an updated return u/s. 139(8A) of the Act on 14.10.2022 declaring a total income of Rs. 5,81,741/-. Based on information that the assessee had made cash deposits aggregating to Rs. 3,58,43,600/- in her current account maintained with The Karur Vysya Bank Ltd. during the relevant previous year, the assessment was reopened by issuing notice u/s. 148 of the Ac....
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....ord at the time of completion of the reassessment proceedings and that the Assessing Officer had, in fact, taken note of the audit report at para 3.3, while passing the reassessment order. According to the Ld. AR, the delay in furnishing the audit report was merely a technical and venial breach which did not result in any loss to the Revenue or prejudice to the assessment proceedings. The Ld.AR contended that there was no addition in the reassessment proceedings. Therefore, it was submitted that the levy of penalty u/s. 271B was not justified and deserved to be deleted. In support of the above contention, the Ld. AR placed reliance on the decision of the Chennai Bench of the Tribunal in the case of Shri Annakodiraj v. ITO in ITA No. 4122/CH....
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....entical, the ratio laid down in the said decision squarely applies. The relevant findings of the Tribunal read as under:- 7. We have heard rival submissions and perused the material on record. The objection filed by the assessee in response to notice issued u/s. 274 r.w.s.271D of the Act for the proposed penalty are as follows:- "I am uneducated farmer. Nature of my business is milk sales on commission basis. I procured milk from the farmers and sold the same to M/s.Jaya Milk Products on commission basis. I am ignorant about the income tax procedures therefore the return of income for the assessment year 2017-18 was not filed within due date. In response to Notice u/s. 148, I filed my return of income for the AY 2017-18 on....
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....eard both the parties, perused the materials available on record and gone through orders of the authorities below. It is an admitted fact that although the assessee has filed Tax Audit Report in Form 3CB as required u/s. 44AB of the Act, beyond due date specified u/s. 139(1) of the Act, but such Tax Audit Report was made available to the AO before completion of assessment proceedings u/s. 143(3) of the Act, on 22.11.2017. It is evident from the fact that the assessee has obtained Tax Audit Report from an Accountant on 28.03.2016 and furnished before the AO during the course of assessment proceedings. Therefore, we are of the considered view that when the Tax Audit Report was made available to the AO before completion of assessment proceedin....
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....hat non-filing of audit report within the due date is a venial technical breach without any mala fide intention on the part of the assessee. Because, completion of audit of books of accounts of the society is under the control of Dept. of Cooperative Audit and thus, unless the Dept. of Cooperative Audit completes audit, the assessee cannot file return of income along with tax audit report. Therefore, we are of the considered view that reasons given by the assessee for not filing tax audit report prescribed u/s. 44AB of the Act, is neither intention nor any mala fide intention, but it is venial technical breach and for this reason, penalty u/s. 271B of the Act, cannot be levied. This principle is supported by the decision of the Hon'ble juri....
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....f the Act and accordingly, the penalty levied stands deleted." 9. Similar view has been taken by the Cochin Bench of the Tribunal in the case of M/s. Johns Biwheelers (supra). The relevant finding of the Cochin Bench of the Tribunal reads as follows:- "7.1 From the material available on record, we are of the view that the assessee got his books of accounts audited on 28/03/2014 which was made available to the Assessing Officer and no prejudice has been caused to the Revenue. Now the short question that arises is whether in this scenario, penalty u/s. 271B of the Act can be levied or not. In our considered opinion, the assessee had only committed technical venial breach which does not create any loss to the exchequer as the....