Loading judgment…
Facts
The assessee filed his return of income along with the Tax Audit Report (TAR) belatedly on 12.09.2024 for AY 2020-21, pursuant to a notice under Section 148. The Assessing Officer (AO) levied a penalty under Section 271B for the delayed filing of the TAR, which was confirmed by the Ld. CIT(A).
Held
The Tribunal held that the non-filing of the TAR within the due date was a technical breach, and the due date fell within the exclusion period granted by the Supreme Court due to Covid-19. The TAR was filed before the assessment order was framed, and the delay was attributed to Covid-19 related issues, not deliberate omission.
Key Issues
Whether penalty under Section 271B is leviable for belated filing of Tax Audit Report when the delay is attributable to Covid-19 related issues and TAR was filed before the assessment order was framed.
Sections Cited
271B, 44AB, 148, 147, 144B, 273B
AI-generated summary — verify with the full judgment below
Detected automatically from the text. The count shows how many other judgments on BharatTax rely on the same authority.
Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI S.R.RAGHUNATHA
आदेश / O R D E R
PER ABY T. VARKEY, JM:
1. This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeal)/NFAC, (hereinafter referred to as ‘Ld.CIT(A)‘), Delhi, dated 10.11.2025 for the Assessment Year (hereinafter referred to as ‘AY‘) 2020-21.
The main grievance of the assessee is against action of the Ld.CIT(A) confirming the penalty levied by the AO u/s.271B of the Income
Tax Act, 1961 (hereinafter referred to as ‘the Act‘) for non-filing of Tax Audit Report (TAR) u/s.44AB of the Act.
The brief facts are that the assessee is an individual, who filed his return of income (RoI) on 12.09.2024, pursuant to the notice issued by the AO u/s.148 of the Act for AY 2020-21. And the assessee is noted to have filed RoI along with TAR admitting total income at ₹5,59,460/-. The AO is noted to have accepted the return filed by the assessee by assessment order dated 27.12.2024 passed u/s.147 r.w.s.144B of the Act. Thereafter the AO initiated penalty u/s.271B of the Act for belated filing of TAR. Pursuant to the notice issued for levy of penalty, the assessee, inter alia, pleaded that TAR has been filed along with RoI on 12.09.2024 i.e. well before the assessment order was framed on 27.12.2024. Hence, pleaded that belated filing of TAR should not attract penalty. However, the AO levied penalty u/s.271B of the Act and saddled him with penalty of ₹1.50 lakhs. On appeal, the Ld.CIT(A) has confirmed the same.
Aggrieved, the assessee is in appeal before this Tribunal.
We have heard both the parties and perused the material available on record. We find that the assessee had belatedly filed the RoI along with TAR for AY 2020-21 on 12.09.2024. Pursuant to notice u/s.148 of the Act, the AO is noted to have passed the Assessment Order on (AY 2020-21) Kalaiarasan Selvaraj :: 3 ::
27.12.2024 u/s.147 r.w.s.144B of the Act for AY 2020-21, which means the TAR was filed well before the assessment was framed by the AO.
Thus, we find that non-filing of TAR within the due date was technical breach; and also take judicial notice of the fact that the due-date of filing of return and the TAR as per Section 44AB of the Act, falls during Covid- 19 period, which period was excluded suo-motto by the Hon’ble Supreme Court exercising powers under Article 142 of the Constitution of India in the case of Re: Cognizance for Extension of Limitation reported in [2022] 441 ITR 722 (SC) from 15.03.2020 to 28.02.2022, for the purpose of computing limitation under all general and special laws which includes Income Tax Act, 1961. It is undisputed that the due-date for filing of TAR falls in the period of exclusion (supra). Thus, we note that in this case, there is reasonable cause for non-levy of penalty as per Section 273B of the Act, which empowers authorities discretion not to levy penalty. Further, non-filing of TAR before the due-date is a technical breach, which delay can’t be attributed to any deliberate omission on the part of the assessee. Hence, the assessee filing TAR only on 12.09.2024 along with the return pursuant to the notice u/s.148 of the Act, and the AO duly accepting the returned income by passing the assessment order on 27.12.2024, reveals that TAR was available with the AO when he framed the assessment order. In such a scenario, the explanation of the assessee that the TAR was belatedly filed due to problems created by (AY 2020-21) Kalaiarasan Selvaraj :: 4 ::
Covid-19 and not due to deliberate omission on the part of the assessee which on the facts of the case as explained by the assessee is found to be reasonable; and therefore, we are of the considered opinion that this is not a fit cases for imposing penalty on the assessee and for such preposition, we rely on the decision of the Hon’ble Madras High Court in the case of P. Senthil Kumar v. CIT reported in (2019) 416 ITR 336 (Mad.)(HC). Hence, we cancel the penalty imposed by the authorities below.
In the result, appeal filed by the assessee is allowed.
Order pronounced on the 04th day of February, 2026, in Chennai.