Failure to timely e-file tax audit report under S.44AB attracts S.271B penalty unless reasonable cause under S.273B proven.

ORDER

(A) This appeal vide I.T.A. No.124/JBP/2024 has been filed by the assessee for assessment year 2016-17 against impugned appellate order dated 28.04.2024 (DIN & Order No.ITBA/NFAC/S/250/2024- 25/1064410436(1) of Ld. Commissioner of Income Tax (Appeals) [“CIT(A)” for short].

(B) This appeal has been filed by the assessee, beyond time limit prescribed under section 253(3) of the Income Tax Act, 1961 (“Act”, for short). The assessee has submitted application for condonation of delay in filing of the appeal pleading that the delay was unintentional and beyond the control of the assessee and has requested to admit the appeal for hearing. The learned Sr. Departmental Representative for Revenue did not express any objection to assessee’s application for condonation of delay in filing of the appeal. In view of the foregoing, and in specific facts and circumstances of the present appeal before us, the delay in filing of this appeal is condoned; and the appeal is admitted for hearing.

(B.1) In this case, order under section 271B of the I.T. Act was passed by the Assessing Officer (“AO”, for short) levying penalty amounting to Rs.1,50,000/-, by the AO vide order dated 28.03.2019 passed u/s 271B of I.T. Act. The relevant portion of the order is reproduced below: -

“Penalty show cause notice u/s 2718 of the IT Act, 1961, dated has been issued on 11/05/2018 and served upon the assessee through ITBA e filing portal the assessee has been asked to explain, on or before 18/05/2018, why an order imposing a penalty on you should not be made uls 271B of the Income Tax Act, 1961. In response to this notice, no compliance has been made by the assessee.

Subsequently the case has been transferred by the ITO-Damoh, to this office vide letter dated 29/01/2019, as the jurisdiction over the case lies with this ward. As he PAN was lying with the ITO-Danch, manual penalty show cause notice u's 2718 has been issued on 01/03/2019 asking the assessee to attend the office on 13/03/2019 and show cause why an order imposing penalty on you should not be made u/s 2718 of the 1T Act, 1961. In response, no submission has been filed vide letter dated 22/03/2019, received in this office on 25/03/2019, submitting that

1. The assessee has got his account audited on 17/11/2016 and furnished his audit report on 31/03/2017 vide acknowledgement number 740374851310317

2. Due to illness of the assessee audit report could not be uploaded by the chartered accountant in time.

3. That the medical certificate in respect of illness of the assessee is enclosed herewith for record.

4. That the provisions of section 273B is applicable in the present case as the assessee has reasonable cause not to furnish audit report, therefore proceedings so initiated w/s 271B may kindly be filed at your end.

5. Notice u/s 271B has been issued on 01/03/2019, which is barred by limitation.

6. Audit report was uploaded on 31/03/2017 therefore the limitation starts from 01/04/2017 for initiation of penalty and penalty could be imposed before the expiry of 31/03/2018. Hence, the penalty proceedings so initiated on 01/03/2019 is barred by limitation in view of the provisions of section 275 of the IT Act, 1961.

The submission of the assessee has been duly considered but not foond tenable for the reasons that

1. As per the provisions of section 44AB of the IT Act, 1961 the persons, carrying on business, whose turnover exceeds one crore rupees in the previous year shall get his account audited by an accountant before the specified date and furnish by that due the report of such audit in the prescribed forms duly signed and verified by such accountant and setting forth such particulars as may be prescribed Meaning thereby that-

1. Getting account audited before the specified date

and

1. furnish the report by that date.

Both the conditions are required to be satisfied in comphance to section 44AB of the I.T Act, 1961. Merely getting account audited on or before the specified due dates is not and cannot be held to be compl