In a ruling granting relief to the assessee, the Pune bench of the Income Tax Appellate Tribunal (ITAT) has held that the ill-health of the wife would constitute “reasonable cause” for the non-compliance of the provisions of section 44B of the Income Tax Act, 1961. Accordingly, the ITAT has deleted the penalty imposed under section 274B of the Income Tax Act.
M/s. Reliable Enterprises, the assessee is a firm engaged in the business of Labour work contracts. The income tax department imposed a penalty under section 273B of the Act for the reason that the assessee had failed to get the accounts audited u/s 44AB and furnish the same.
Allowing the second appeal filed by the assessee, a bench of Shri R.S. Syal, Vice President and Shri Partha Sarathi Chaudhury, Judicial Member observed that “It is seen that there is an infringement of provisions of section 44AB inasmuch as the assessee failed to get the accounts audited and furnish the necessary report before the stipulated period. The assessee pleaded a reasonable cause before the AO that the audit could not be carried out because of ill-health of his wife, which further worsened the family problems. Section 271B is subject to provisions of section 273B which provides that in case of a reasonable cause, penalty under the concerned section need not be imposed. In the given set of facts and circumstances, we are satisfied that there was a reasonable cause which prevented the assessee from complying with the necessary provisions in getting the accounts audited and furnishing the report to the AO before the due date. We, therefore, order to delete the penalty.”
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