| The Tax Publishers2020 TaxPub(DT) 2530 (Gau-Trib) : (2020) 183 ITD 0348 : (2020) 206 TTJ 0354 INCOME TAX ACT, 1961
Section 271B
Where penalty notice under section 271B had not spelt out what was the fault for which the assessee was being proceeded against for levy of penalty, the said notice was vague and therefore, bad in law and hence, the penalty levied under section 271B would not be sustainable.
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Penalty under section 271B - Delay in filing tax audit report - Reasonable cause Penalty based on vague and defective notice -
AO noticed that assessee was required to get its accounts audited under section 44AB before 30-09-2016 and furnish tax audit report by 17-10-2016 for assessment year under consideration i.e., 2016-17. As, no such tax audit report was furnished by the specified date, accordingly the AO levied penalty under section 271B. Assessee submitted that its accountant left the service without finalizing the accounts and another accountant was appointed in his place that resulted in delay in finalizing accounts as well as getting the accounts audited, which caused delay in submission of the audit report. Held: It was found that the penalty notice under section 271B had not spelt out what was the fault for which the assessee was being proceeded against for levy of penalty. Since the AO had not struck down the irrelevant portion/fault in the penalty notice, which was not applicable in the facts and circumstances of the case, the said notice was vague and therefore, bad in law. Further, the assessee furnished the tax audit report belatedly on 31-03-2016 along with the return of income, which was accepted by the Revenue. Moreover, the assessee explained that the delay in furnishing audit report happened as its accountant left the service without finalizing the accounts. Therefore, there was reasonable cause for not filing the tax report within due date as stipulated under section 273B. Hence, the penalty levied under section 271B would not be sustainable.
REFERRED : CIT v. M/s SSA'S Emerald Meadows [ITA No. 380 of 2015, dt. 23-11-2015] : 2018 TaxPub(DT) 0953 (Karn-HC), CIT & Ors. v. M/s Manjunatha Cotton & Ginning Factory & Ors. (2013) 359 ITR 565 (Karn-HC) : 2014 TaxPub(DT) 0202 (Karn-HC), Asstt. CIT v. Kamlesh R. Agarwal (Huf). (2006) 99 ITD 27 (Ahd-TM) : 2006 TaxPub(DT) 1142 (Adh-Trib)
FAVOUR : In assessee's favour
A.Y. :
IN THE ITAT, GUWAHATI BENCH
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