ROHAN VASANT KALE,NASHIK vs. ITO WARD 1 NASHIK, NASHIK

This is an appeal filed by the appellant directed against the order of National Faceless Appeal Centre (NFAC), Delhi, dated 31.10.2023 passed u/s 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) confirming the levy of penalty of Rs.1,50,000/- u/s.271B of the Act.

Briefly, the facts of the case are that the appellant is an individual deriving income from supply of dental material and equipment. Return of income for the A.Y. 2017-18 was filed on 19.09.2019. Against the said return of income, the assessment was completed u/s.144 of the Act vide order dt. 12.12.2019. After completion of the assessment proceedings, the AO had issued show cause notice u/s.274 r.w.s.271 of the Act for failure of the assessee to get the accounted audited u/s.44AB of the Act as stipulated under the provisions of the Act. It was submitted that the Tax Audit Report was submitted on 04.10.2018 and the delay had occurred as the appellant underwent surgery in the month of October, 2017. However, rejecting the explanation of the appellant, the AO vide penalty order dt.11.02.2021 levied penalty of Rs.1,50,000/- u/s.271B of the Act. Even on appeal, the ld. CIT(A) confirmed the penalty levied by the Assessing Officer.

Being aggrieved by the order of CIT(A), the appellant is in appeal before the Tribunal.

We heard the rival submissions and perused the relevant material on record. The issue in the present appeal is whether or not the AO was justified in levying penalty of Rs.1,50,000/- u/s.271B of the Act. It is an admitted fact that the Tax Audit Report was submitted on 04.10.2018 much before the completion of assessment, i.e. 12.12.2019. No doubt the penalty is leviable under the provisions of section 271B even for the delay in filing the Tax Audit Report. Without going into the explanation given by the assessee, we are of the considered opinion that no prejudice was caused to the Revenue on account of delay in submission of Tax Audit Report.

In the result, the appeal of the appellant is allowed.