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

Jigneshbhai Rasikbhai Savalia, Surat vs. Income Tax Officer, Ward - 1(2)(2), Surat

In the result, the appeal of assessee is allowed

ITA 133/SRT/2023[2015-16]Status: DisposedITAT Surat09 Mar 2023AY 2015-16

Bench: Shri Pawan Singhआ.अ.सं./Ita No.133/Srt/2023 (Ay 2015-16) (Hearing In Virtual Court) Jigneshbhai Rasikbhai Savalia, Income Tax Officer, Ward B/1 Bombay Market, No.1(2)(2), Aayakar Vs Umarwada, Surat-395003 Bhavan, Majura Gate, Pan No: Aobps 3537 D Surat-395001 अपीलाथ"/Appellant ""यथ" /Respondent "नधा"रती क" ओर से /Assessee By Shri Sapnesh R Sheth, C.A राज"व क" ओर से /Revenue By Shri Vinod Kumar, Sr-Dr Date Of Filing Appeal 21.02.2023 सुनवाई की तारीख/Date Of Hearing 09.03.2023 उ"घोषणा क" तार"ख/Date Of 09.03.2023 Pronouncement Order Under Section 254(1) Of Income Tax Act Per Pawan Singh: 1. This Appeal By Assessee Is Directed Against The Order Of National Faceless Appeal Centre, Delhi [For Short To As “Nfac/Ld. Cit(A)”] Dated 18.01.2023 For Assessment Year 2015-16, Which In Turn Arises Out Against The Penalty Levied By Assessing Officer/ Income Tax Officer Ward-1(2)(2) Surat, Under Section 271B Of The Income Tax Act, 1961 (Hereinafter Referred To As ‘The Act’) Dated 27.02.2018. The Assessee Has Raised The Following Grounds Of Appeal:- “1. On The Facts Of The Case As Well As Law On The Subject, The Learned Commissioner Of Income-Tax (Appeals), Has Erred In Confirming The Action Of Assessing Officer In Imposing Penalty Of Rs.69,210/- U/S 271B Of The I.T.Act, 1961. Jigneshbhai R. Savalia 2. It Is Therefore Prayed That Penalty Imposed By Assessing Officer & Confirmed By Commissioner Of Income-Tax (Appeals) May Please Be Deleted. 4. The Appellant Craves Leave To Add, Alter Or Delete Any Ground(S) Either Before Or In The Course Of Hearing Of The Appeal.”

Section 139(1)Section 143(3)Section 254(1)Section 271BSection 44A