BASHIR USMAN KARBHARI,KARAD vs. DY.COMMISSIONER OF CENTRAL CIRCLE, 2(1), PUNE

This appeal by the assessee is directed against the order passed by the ld. CIT(A), Pune 12 on 13-01-2023 in relation to the assessment year 2017-18.

The only issue raised in this appeal is against the confirmation of penalty of Rs.1,50,000/- imposed by the Assessing Officer (AO) u/s.271B of the Income-tax Act, 1961 (hereinafter also called ‘the Act’).

Briefly stated, the facts of the case are that the assessee filed his e-return on 28-03-2018 declaring total income at Rs.13,49,120/-. Since the accounts were required to be audited and the assessee failed to submit the audit report before the due date u/s.139(1), the AO imposed penalty u/s.271B amounting to Rs.1,50,000/-. Such penalty came to be affirmed in the first appeal, against which the assessee has approached the Tribunal.

We have heard the rival submissions and gone through the relevant material on record. It is evident from the penalty order passed by the AO u/s.271B that the assessee failed to get the accounts audited, as he was suffering from Swine flu during that period and doctor had advised to take rest. This assertion has been recorded in the penalty order, which has not been controverted by the AO. Though, admittedly, there is a delay in getting the accounted audited in terms of section 44AB and filing the audit report within the time allowed u/s 139(1) of the Act, which otherwise requires imposition of penalty u/s.271B, but the prescription of section 273B applies as per which if there exists a reasonable and sufficient cause for non-compliance, then the penalty should not be imposed. We are satisfied with the cause pleaded by the assessee before the authorities below, being, the medical condition, for failure to file the audit report in time. We, therefore, order to delete the penalty.

In the result, the appeal is allowed.