Section 271B of the Income Tax Act

The decision most relied on for Section 271B is Ashok Pai v. CIT (292 ITR 11), cited in 812 of the 1,993 judgments on BharatTax that turn on this section.

Leading authorities on Section 271B

Ashok Pai v. CIT
292 ITR 11 · 2007 · Supreme Court
812
citing judgments

“Concealment of particulars of income” and “furnishing inaccurate particulars of income” are two distinct offences under Section 271(1)(c) of the Income Tax Act. A penalty cannot be levied under one limb if the show cause notice or basis for penalty specifies the other, as this constitutes a complete variance in the reasons for assuming jurisdiction.

Surajmal Parsuram Todi v. CIT
222 ITR 691 · 1996 · High Court
114
citing judgments

A penalty under Section 271B for failure to get accounts audited cannot be levied if a penalty under Section 271A has already been imposed for non-maintenance of books of account.

CIT v. S.K. Gupta & Co.
322 ITR 86 · 2010 · High Court
110
citing judgments

If a penalty is levied under Section 271A for failure to maintain books of account, then a separate penalty under Section 271B for failure to get accounts audited under Section 44AB cannot also be levied.

CIT v. Bisauli Tractors
299 ITR 219 · 2008 · High Court
81
citing judgments

If an assessee has not maintained books of accounts, the question of getting those accounts audited under Section 44AB does not arise, and therefore, a penalty under Section 271B for failure to get accounts audited cannot be levied. Non-maintenance of books is separately punishable under Section 271A.

Azadi Bachao Andolan v. Union of India
252 ITR 471 · 2001 · High Court
57
citing judgments

A penalty under sections like 271D or 271E is not automatically imposed if the assessee proves there was a reasonable cause for the failure. The interpretation of 'reasonable cause' is that which would prevent a person of average intelligence and ordinary prudence from acting negligently or in bad faith.

DIT v. Mahindra & Mahindra Ltd.
365 ITR 560 · 2014 · High Court
56
citing judgments

If a sum is not chargeable to tax in the hands of the recipient, the payer is not obligated to deduct tax at source, and consequently, no disallowance under section 40(a)(i) can be made. The Bombay High Court also affirmed that penalty proceedings under section 271B may be quashed in certain circumstances.

Premier Breweries Ltd. v. Commissioner of Income Tax
372 ITR 180 · 2015 · Supreme Court
52
citing judgments

Whether an assessee has shown 'reasonable cause' under Section 273B, particularly in the context of penalties under Section 271D for violations of Section 269SS, is a question of law involving a legal inference from primary facts. Penalties under Section 271D are not leviable if reasonable cause is established, even for journal entries, provided transactions are genuine and bona fide.

Bharat Construction Co. v. ITO
153 CTR 414 · 1999 · High Court
49
citing judgments

When an assessee fails to maintain books of account, resulting in a confirmed penalty under section 271A, no additional penalty under section 271B can be levied for the failure to get accounts audited under section 44AB, as there are no accounts to audit.

P.Senthil Kumar v. PCIT
416 ITR 336 · 2019 · High Court
48
citing judgments

Penalty under section 271B is not leviable for a venial technical breach, such as the late filing of a tax audit report, if there is no mala fide intention and the assessee demonstrates reasonable cause.

Bhailal Manilal Patel v. CIT
49 Taxmann.com 539 · 2014 · High Court
47
citing judgments

Penalty under section 271(1)(c) cannot be imposed based on a protective assessment order. Initiation of penalty proceedings is impermissible without a substantive assessment order that finally adds income to the assessee's hands.

Judgments on Section 271B

Arvind Kumar, Kanpur Nagar vs. ITO Ward 1(2) (1), Kanpur Nagar

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 285/LKW/2025[2019-20]Status: DisposedITAT Lucknow30 Apr 2026AY 2019-20

Bench: Sh. Sudhanshu Srivastava & Sh. Nikhil Choudharya.Y. 2019-20 Arvind Kumar, Vs. Income Tax Officer, C/O Shri Shailendra Sachan Ward-1(2)(1), Kanpur (Advocate) R/O 113/223 Swaroop Nagar, Kanpur Pan: Ekypk0062C (Appellant) (Respondent) Assessee By: None Revenue By: Sh. R.R.N. Shukla, Addl Cit Dr Date Of Hearing: 05.02.2026 Date Of Pronouncement: 30.04.2026 O R D E R Per Nikhil Choudhary, A.M.: This Is An Appeal Filed By The Assessee Against The Orders Of The Ld. Cit(A), Nfac Dated 14.02.2025, Wherein The Ld. Cit(A) Has Upheld The Penalty Of Rs. 1,50,000/- Levied Upon The Assessee Under Section 271B Of The Income Tax Act. The Grounds Of Appeal Are As Under:- “1. That The Ld. Cit(A), Nfac Has Erred In Law & On Facts By Sustaining The Penalty Of Rs. 150000/- Imposed By The Ld. Ao U/S 271B Of The I.T. Act, 1961. 2. That The Penalty Order Of The Ld. Cit(A) U/S 271B Of The I.T. Act, 1961 Is Illegal, Wholly Unjustified, Unsustainable In Law & Deserves To Be Deleted. 3. That Any Other Relief Or Reliefs As May Deem Fit In The Case & Circumstances Be Granted. 4. That The Appellant Craves Leave To Add, Amend Or Withdraw Any Grounds Of Appeal On Or Before Hearing Of Appeal.” 2. The Facts Of The Case Are That During The Course Of Assessment Proceedings, The Ld. Ao Observed That The Assessee Had A Turnover Of Rs.

For Appellant: NoneFor Respondent: Sh. R.R.N. Shukla, Addl CIT DR
Section 147Section 271BSection 44A