The Amritsar bench of the Income Tax Appellate Tribunal (ITAT) deleted the penalty imposed on late filing of audit reports.
Tarlok Singh, the appellant assessee appealed against the order passed by the Commissioner of Income Tax(Appeals) for confirming the penalty imposed by the assessing officer for the late filing of an audit report under section 44AB of the Income Tax Act, 1961.
Rohit Kapoor and V.S. Aggarwal, the counsel for the assessee contended that the assessing officer(AO) had levied a minimum penalty on violation of Section 271B of the Income Tax Act for non-filing the Tax Audit Report within the prescribed time.
It was also submitted that the lower authorities were not justified in confirming the penalty, ignoring the bonafide reasons for failure in filing the Audit Report. The assessee was prevented by sufficient cause as per the provisions prescribed under section 273B of the Income Tax Act for not filing the Audit Report in time.
The assessee had further explained the detailed bonafide reasons for the delay in filing the Audit Report, on account of the expiry of the digital signature and due to a technical glitch in the system. Thus the assessee was prevented by reasonable cause to update the digital signature and upload the required Audit Report.
Nakul Aggarwal, the counsel for the respondent contended that the assessing officer had considered the audit report and passed the Assessment Order accepting the return of income subject to nominal disallowance. It was also contended that the order passed by the lower authorities was by the law.
The bench observed that the assessee failed to file the Tax Audit Report before the due date due to a technical glitch. It was also observed that the explanation filed by the assessee can be accepted as a reasonable cause and was not a fit case for imposing a penalty under section 271B of the Income Tax Act.
The two-member bench comprising Dr M. L. Meena(Accountant) and Sh. Anikesh Banerjee( Judicial) held that the penalty levied under section 271B of the Income Tax Act was against the provision of law and is liable to be deleted while allowing the appeal filed by the assessee.
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