THE WESLEYAN BOARD OF CHRESTIAN INSTITUTION, RAJNANDGAON,RAJNANDGAON vs. INCOME TAX OFFICER, EXEMPTION WARD 2 RAIPUR, RAIPUR

ITA 662/RPR/2026Status: DisposedITAT Raipur06 October 2026AY 2019-20209 pages
AI SummaryAllowed

What were the facts?

The assessee, The Wesleyan Board of Chrestian Institution, is an educational society. For Assessment Year 2019-20, proceedings under Section 148 were initiated, and the assessee filed a return under Section 147 read with Section 144E, reporting total income of Rs. 25,82,960 without any variation by the AO. The AO initiated penalty proceedings under Section 271B for non-furnishing of an audit report under Section 44AB, despite the assessee's return stating 'No' to the audit liability. The penalty was levied at Rs. 1,50,000. The assessee appealed to the CIT(Appeals)/NFAC, which dismissed the appeal, confirming the penalty. The assessee is now before the ITAT.

What did the Tribunal hold?

The Tribunal held that the penalty under Section 271B is not leviable in this case. The Tribunal considered the provisions of Section 273B, which states that no penalty shall be imposable for any failure if the assessee proves that there was a reasonable cause for the failure. While the Revenue disregarded the assessee's contention of viral fever due to lack of documentary evidence, the Tribunal noted that the Revenue also failed to produce any report refuting the assessee's submissions. The Tribunal relied on the case laws cited by the assessee and the provision of Section 273B, concluding that once a reasonable cause is explained by the assessee, there should not be an imposition of penalty under Section 271B. The order of the CIT(Appeals)/NFAC was set aside. The Tribunal did not expressly leave any issue undecided.

What were the issues?

1. Whether the penalty under Section 271B is leviable when the assessee, an educational institution, claims it is not carrying on business and therefore not liable for audit under Section 44AB, especially when the return explicitly stated 'No' to audit liability? (Question of law and fact, turning on Section 44AB and Section 271B). Assessee's contentions: The assessee argued that as a non-profit educational institution, it is not carrying on business and thus Section 44AB is not applicable. It relied on various Tribunal decisions concerning educational/charitable institutions and Section 271B, including Ankur Udbodak Samiti, National Law University, United Education Society, Sant Baba Rangi Ram Charitable Trust, and Bhartiya Shiksha Prachar Samiti. The assessee also contended that the delay in filing the audit report was due to viral fever, constituting a reasonable cause under Section 273B. Revenue's contentions: The Revenue, through the Ld. Sr. DR, did not present specific arguments in the judgment. However, the lower authorities (AO and CIT(A)/NFAC) proceeded on the basis that Section 44AB was applicable and that the assessee failed to demonstrate a reasonable cause for the delay in filing the audit report.

Which sections of the Income-tax Act were involved?

Section 148,Section 147,Section 144E,Section 44AB,Section 271B,Section 273B,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, RAIPUR BENCH “SMC”, RAIPUR

Before: SHRI PARTHA SARATHI CHAUDHURY

For Respondent: Shri Piyush Tripathi, Sr. DR
Hearing: 05.10.2026Pronounced: 06.10.2026

PER PARTHA SARATHI CHAUDHURY, JM

The present appeal preferred by the assessee emanates from the order of the Ld.CIT(Appeals)/NFAC, Delhi dated 09.06.2026 for the assessment year 2019-20 as per the grounds of appeal on record.

2.

At the time of hearing none appeared for the assessee. However, documents on record are carefully perused, considered and submissions of the Ld. Sr. DR are

The order continues below.

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