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

ITA 662/RPR/2026Status: DisposedITAT Panaji06 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 on March 10, 2024, reporting total income of Rs. 25,82,960, with no variation from the Assessing Officer (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 liability for such an audit. 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 imposable if the assessee proves a reasonable cause for the failure, as per Section 273B of the Income Tax Act, 1961. The assessee had explained the delay of three months in filing the audit report was due to suffering from viral fever. While the revenue and the lower appellate authority disregarded this explanation for lack of documentary evidence, the Tribunal noted that the revenue also failed to produce any report refuting the assessee's submissions. Considering the case laws relied upon by the assessee and the provisions of Section 273B, the Tribunal found that once a reasonable cause is explained, the penalty under Section 271B should not be imposed. Therefore, the order of the CIT(Appeals)/NFAC was set aside. The Tribunal did not expressly decide on the initial liability under Section 44AB, focusing instead on the reasonable cause for the delay in filing the audit report.

What were the issues?

1. Whether the Tribunal has to decide if the assessee, an educational society, was liable for an audit under Section 44AB of the Income Tax Act, 1961, for Assessment Year 2019-20, considering its return indicated no such liability. - Assessee's contention: The assessee, being a non-profit educational institution, is not carrying on business and therefore Section 44AB is not applicable. It relied on its return's declaration of 'No' for Section 44AB audit and cited various Tribunal decisions like Ankur Udbodak Samiti, National Law University, etc. - Revenue's contention: Not recorded in the judgment. 2. Whether the penalty under Section 271B of the Income Tax Act, 1961, is leviable for delayed filing of the audit report, given the assessee's explanation of suffering from viral fever. - Assessee's contention: The delay of three months in filing the audit report was due to viral fever, and Section 273B provides for waiver of penalty if there is a reasonable cause. It cited judicial pronouncements on Section 271B for educational/charitable institutions. - Revenue's contention: The CIT(A)/NFAC held that the viral fever explanation was not supported by documentary evidence and did not adequately explain the delay, and that the assessee failed to demonstrate reasonable cause.

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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