SUBRAMANIK GEETHA,VELLORE vs. ITO, WARD-1,, VELLORE

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ITA 626/CHNY/2026Status: DisposedITAT Chennai14 July 2026AY 2016-174 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the penalty under Section 271B was not justified as the audit report was available before the completion of assessment proceedings. Therefore, the penalty was set aside.

What were the facts?

The assessee filed an appeal with a 2-day delay, which was condoned. The core issue was the confirmation of penalty for non-furnishing of an audit report.

What were the issues?

Whether the penalty under Section 271B is leviable when the audit report is furnished before the completion of assessment proceedings.

Which sections of the Income-tax Act were involved?

Section 271B,Section 139,Section 148

AI-generated summary — verify with the full judgment below

Before: SHRI SS VISWANETHRA RAVI & MS. PADMAVATHY.S

Hearing: 01.06.2026Pronounced: 14.07.2026

PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:

This appeal filed by the assessee is directed against the order dated 26.11.2025 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, for the assessment year 2016-17. 2

2.

We find that this appeal was filed with a delay of 02 days. The assessee filed an affidavit explaining the reasons to condone the said

delay. On perusal of the same and upon hearing both the parties, we

find the reasons stated by the assessee are bonafide which really

prevented the assessee in filing the appeal in time. Thus, delay of 02

days condoned.

3.

We find the short point involved in this appeal is as to whether the ld.CIT(A) is justified in confirming the penalty u/s. 271B of the Income-

tax Act, 1961 (herein after “the Act”) for non-furnishing audit report in the facts and circumstances of the case. We find, on perusal of the para no.4 of the impugned order, it is noted that no return of income filed u/s. 139 of the Act, but however, filed return of income in response to notice u/s. 148 in ITA No. 603/Chny/2022 reported in 147 Taxmann.com 608 (Chennai

3 Tribunal), wherein this Tribunal deleted the penalty levied u/s. 271B of the Act by holding that once the audit report made available before completion

of assessment proceedings, then there is no reason for levy of penalty. On an examination of the said order, we note that the Tribunal in order to come

to such conclusion placed reliance on the order of this Tribunal in the case

of M/s. TBD 101 Uthangarai Milk Producers Co-operative Society Ltd in ITA No. 152/Chny/2021, dated 29.06.2022. Therefore, we find the facts

and circumstances in the present case are similar to the facts and circumstances in Ramunaicker Raja (Supra), and we hold since audit

report was available before assessment order, the penalty u/s. 271B of the Act which was confirmed by the ld.CIT(A) is not justified and set aside.

Resultantly, the penalty imposed u/s. 271B of the Act is deleted. Thus,

grounds raised by the assessee is allowed.

4.

In the result, appeal filed by the assessee is allowed. Order pronounced on 14th July, 2026 at Chennai. (एस. पदमावती) (यस यस "व"वने" र"व) (S. PADMAVATHY) (SS VISWANETHRA RAVI) लेखा सद"य/Accountant Member "या"यक सद"य / Judicial Member

Chennai, Dated: 14.07.2026 JPV

4 आदेश की (ितिलिप अ.ेिषत/Copy to: 1. अपीलाथ'/Appellant, 2.()थ'/ Respondent, 3. आयकर आयु//CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय (ितिनिध/DR & 5. गाड$ फाईल/GF. PRASANNA VANI JETTY VANI JETTY Date: 2026.07.16 14:06:07 +05'30'

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