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

Anunoy Mukherjee, Durgapur vs. I.T.O., Ward-1(4), Durgapur

In the result, appeal of the assessee is allowed

ITA 555/KOL/2022[2017-2018]Status: DisposedITAT Kolkata23 Feb 2023AY 2017-2018

Bench: Shri Sanjay Garg, Hon’Ble & Dr. Manish Borad, Hon’Blei.T.A. No. 555/Kol/2022 Assessment Year: 2017-18 Anunoy Mukherjee Income Tax Officer, Ward-1 Vs (4), Durgapur Near Hdfc Bank Bamunara Kanksa Durgapur - 713212 [Pan : Cydpm3295A] अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : Shri Vishal Kr. Agrawal, C.A. & Shri Rohitash Gupta, C.A. Revenue By : Shri P.P. Barman, Addl. Cit, Sr. D/R सुनवाई क" तार"ख/Date Of Hearing : 16/02/2023 घोषणा क" तार"ख /Date Of Pronouncement: 23/02/2023 आदेश/O R D E R Per Dr. Manish Borad: The Present Appeal Is Directed At The Instance Of The Assessee Against The Order Of The National Faceless Appeal Centre, Delhi (Hereinafter The “Ld. Cit(A)”) Dated 21/07/2022, Passed U/S 250 Of The Income Tax Act, 1961 (‘The Act’), For Assessment Year 2017-18. 2. The Registry Has Pointed Out That There Is A Delay Of One (1) Day In Filing Of This Appeal In Time Before The Tribunal. The Assessee Has Filed A Petition For Condonation Of Delay Stating The Reasons Of Delay. After Perusing The Same, We Find That The Assessee Was Prevented By Sufficient Cause From Filing The Appeal In Time Before The Tribunal. Hence, The Delay Is Condoned & The Appeal Is Admitted. 3. The Only Issue That Arises For Our Consideration Is Whether The Ld. Cit(A) Was Justified In Confirming The Penalty U/S 271B Of The Act At Rs.1,36,214/-, Levied For Not Getting The Books Of Account Audited U/S 44Ab Of The Act.

For Appellant: Shri Vishal Kr. Agrawal, C.A. & ShriFor Respondent: Shri P.P. Barman, Addl. CIT, Sr. D/R
Section 194CSection 250Section 271Section 271ASection 271BSection 271CSection 271DSection 271ESection 271FSection 271G

Pranab Gohain, Dibrugarh vs. Income Tax Office, Ward-1(2, Dibrugarh

In the result, appeal of the assessee is dismissed

ITA 197/GTY/2019[2016-17]Status: DisposedITAT Guwahati20 Feb 2023AY 2016-17

Bench: Shri Rajpal Yadav, Hon’Ble & Dr. Manish Borad, Hon’Blei.T.A. No. 197/Gty/2019 Assessment Year: 2016-17 Pranab Gohain Ito, Ward-1(2), Jiban Phukan Nagar Vs Dibrugarh Dibrugarh – 786003 (Assam) [Pan : Acqpg7405H] अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : None Revenue By : Shri N.T. Sherpa, Jcit सुनवाई क" तारीख/Date Of Hearing : 09/01/2023 घोषणा क" तारीख /Date Of Pronouncement: 20/02/2023 आदेश/O R D E R Per Dr. Manish Borad: The Present Appeal Is Directed At The Instance Of The Assessee Against The Order Of The Learned Commissioner Of Income Tax (Appeals), Dibrugarh, (Hereinafter The “Ld. Cit(A)”) Dt. 26/02/2019, Passed U/S 250 Of The Income Tax Act, 1961 (“The Act’), For Assessment Year 2016-17. 2. None Appeared On Behalf Of The Assessee. Under These Circumstances, We Dispose Off The Case Ex-Parte On Merits Qua The Assessee After Hearing The Ld. Departmental Representative. 3. Heard The Ld. D/R. The Only Issues Raised In The Instant Appeal Is Against The Levy Of Penalty U/S 271B Of The Act. As Per The Provisions Of Section 271B Of The Act, If Any Person Fails To Get His Accounts Audited In Respect Of Any Previous Year Or Years Relevant To An Assessment Year, Or Fails To Furnish A Report Of Such Audit As Required U/S 44Ab Of The Act, The Assessing Officer May Direct That Such Person Shall Pay By Way Of Penalty A Sum Equal To ½ % Of The Total Sales, Turnover Or Gross Receipts, As The Case May Be Or A Sum Of Rs.1,50,000/- Whichever Is Less.

For Appellant: NoneFor Respondent: Shri N.T. Sherpa, JCIT
Section 250Section 271BSection 273BSection 44A