ITAT Deletes Penalty of Rs. 1.5 Lakh u/s 271B for Delayed Tax Audit Due to Managing Partner’s Demise [Read Order]
The assessee contended that the delay in submitting the tax audit report was caused by the death of its 84-year-old managing partner, which disrupted its operations.
![ITAT Deletes Penalty of Rs. 1.5 Lakh u/s 271B for Delayed Tax Audit Due to Managing Partner’s Demise [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/04/tax-audit-site-img.jpg "ITAT Deletes Penalty of Rs. 1.5 Lakh u/s 271B for Delayed Tax Audit Due to Managing Partner’s Demise [Read Order]")
The Cochin bench of the Income Tax Appellate Tribunal (ITAT) deleted the penalty of Rs. 1.5 lakhs imposed under Section 271B for delayed tax audit due to the demise of the managing partner. Coming to the facts of the case, the assessee firm did not file its income tax return for assessment year (AY ) 2014-15 under Section 139(1) of the Income Tax Act, 1961. The assessing officer (AO) issued...
The Cochin bench of the Income Tax Appellate Tribunal (ITAT) deleted the penalty of Rs. 1.5 lakhs imposed under Section 271B for delayed tax audit due to the demise of the managing partner.
Coming to the facts of the case, the assessee firm did not file its income tax return for assessment year (AY ) 2014-15 under Section 139(1) of the Income Tax Act, 1961. The assessing officer (AO) issued a notice under Section 148 on 30.03.2021, making the firm to file its return on 13.04.2021, declaring a total income of Rs. 37,41,790. The assessment was completed on 24.03.2022 under Section 144 of the Income Tax Act, accepting the declared income but imposing a penalty under Section 271B for the delayed submission of the tax audit report.
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The firm appealed to the Commissioner of Income Tax (Appeals) [CIT(A)], which upheld the penalty.
Aggrieved by the above decision of CIT(A), the assessee approached the ITAT, stating a delay of 138 days in filing the appeal due to unavoidable circumstances. The ITAT condoned the delay after reviewing the firm’s affidavit, which explained the reasons behind the late filing.
The assessee contended that the delay in submitting the tax audit report was caused by the death of its 84-year-old managing partner, which disrupted its operations.
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The CIT(A) had dismissed this contention of the assessee, stating that the managing partner’s death a year prior had no bearing on the delay, especially since the firm had managed to file audited returns on time in subsequent years.
The ITAT noted that the assessment for AY 2014-15 was completed without any additions to the declared income, indicating no prejudice to the Revenue due to the delay.
Relying on a similar judgement by the Kerala High Court in the case of Chavakkad Service Co-op. Bank Ltd [2024] 169 taxmann.com 45 (Kerala), where the penalty was deleted under comparable circumstances, deleted the penalty.
The bench comprising Soundararajan (Judicial Member) and Inturi Rama Rao (Accountant Member) deleted the penalty of Rs. 1,50,000 levied under Section 271B of the Income Tax Act.
To Read the full text of the Order CLICK HERE
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