INCOME TAX ACT, 1961

Section 271B

Penalty under section 271B - Leviability - Contravention of provisions of section 44AB - Reasonable cause for delay--Documents got impounded in survey

AO observed that assessee-firm defaulted in getting accounts audited within the time specified under section 44AB and furnishing the same to Revenue within the time. Accordingly, the AO levied penalty under section 271B. Assessee submitted that various incriminating documents were found and impounded during survey proceedings and in order to get them accounted in the books of account, a considerable time was taken and therefore, it could not complete the books of account within the time, which resulted delay in the audit of the accounts. Hence, the assessee claimed that there was reasonable cause, which prevented to get its accounts audited and furnished the same within the time limit. Held: There was no infirmity in tax audit report as observed by AO as such the income declared by the assessee in its income tax return was accepted without pointing any variation. Thus, it was transpired that there was substantial compliance on the part of the assessee in getting the accounts audited and subsequently furnishing the tax audit report, which was accepted by Revenue without pointing out any defect. Therefore, the delay in getting books of account audited could not be considered as failure on the part of the assessee as envisaged under the provisions of section 271B and hence, the said delay could not attract penalty provisions as specified under section 271B.

REFERRED : Viswanathan Silk Centre v. CIT (1993) 203 ITR 131 (Mad) : 1993 TaxPub(DT) 0253 (Mad-HC) Addl. CIT v. Mohammed & Sons (1985) 154 ITR 220 (Raj) : 1985 TaxPub(DT) 0395 (Raj-HC) ITO v. Bindra Ban Bansi Lal (2001) 78 ITD 228 (Asr) : 2001 TaxPub(DT) 0437 (Asr-Trib) and ITO v. Saphire Traders (P) Ltd. 1999 66 TTJ 180 (Ahd)

FAVOUR : In assessee's favour

A.Y. : 2013-14

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