Delay in filing Tax Audit Report is a Technical Venial Breach: ITAT deletes Penalty [Read Order]

The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) has held that the delay in filing of the tax audit report is a technical venial breach for which, the penalty under Section 271B of the Income Tax Act is not sustainable.

The assessee, a businessman, did not attach tax audit report u/s 44AB of the Act, along with the return of income. The Assessing Officer levied penalty under section 271B of the Income Tax Act for violation of provisions of Section 44AB of the Act, for Rs.77,559/-.

Before the authorities, the assessee pleaded that the tax audit was completed on 27/09/2013, by the tax auditor and thereafter, the said tax auditor suddenly fell ill and accordingly the tax audit report could not be filed along with the return of income. Without the tax audit report, the income tax return was electronically uploaded as it was lying with the tax auditor.

The Tribunal observed that the assessee had only committed a technical venial breach without creating any loss to the exchequer. In the instant case, the tax audit report was very much made available before the ld. Assessing Officer before the completion of the assessment proceedings.

It was observed that the assessee had only committed a technical venial breach without creating any loss to the exchequer. It further noted that the tax audit report was very much made available before the ld. Assessing Officer before the completion of the assessment proceedings.

The Tribunal observed that “this decision was rendered in the context of adjudication of the quantum of deduction of the assessee. Hence the said analogy could very well be drawn and used in penalty proceedings like that of the assessee. To conclude, we hold that the assessee had committed only technical venial breach for which he could not be penalized. In view of the aforesaid observation and respectively following the decision of the Hon’ble Madras High Court in the case of Commissioner of Income-tax v. A.N. Arunachalam (supra), we direct the ld. Assessing Officer to delete the penalty levied u/s 271B of the Act.”