TMI Blog2019 (3) TMI 1466X X X X Extracts X X X X X X X X Extracts X X X X ..... ithstanding the provision of Section 271B, no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provision if he proves that there was reasonable cause for the said failure. The assessee has given an explanation regarding the delay in filing the audit report. There is no unreasonable delay in filing the report. It is not mandatory that in every case of default penalty has to be imposed. In the instant case, there was only a delay of two months in filing the audit report along with the returns which delay was caused due to a valid explanation as submitted by the assessee. On an overall conspectus of the matter, we are firmly of the opinion that the assessee has proved the exi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect income of the assessee and that, no prejudice is caused to the Revenue because of the delay. Hence, the ITAT held that this is not a case fit for levying penalty under Section 271B of the Act. 3. Aggrieved by this finding of the ITAT, the Revenue is before us raising the following questions of law as re-framed by us: (1) Whether the ITAT was justified in deleting the penalty by accepting the assessee's explanation? (2) Whether the ITAT was justified in holding that filing of the audit report in time is only discretionary? 4. We heard the learned Senior Counsel, Government of India (Taxes) for the Revenue and the learned Counsel for the assessee. 5. The assessee did not file the audit report together with the returns w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in business, or of the gross receipts in profession, in such previous year or years or a sum of one hundred thousand rupees, whichever is less. The provision of Section 271B of the Act makes it clear that the imposition of penalty for non-compliance with the provision of Section 44AB is not mandatory, though the filing of such report may be mandatory, as the word used in Section 44AB is 'shall'. But the the word 'may' used in section 271B gives discretion to the Assessing Officer to impose penalty or not to impose penalty. Further, the provision of Section 273B of the Act contains a non obstante clause and provides that notwithstanding the provision of Section 271B, no penalty shall be imposable on the person or the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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