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2016 (10) TMI 365 - AT - Income TaxPenalty levied by the AO u/s.271B - not getting the accounts audited before the specified date - Held that:- We find some force in the submission of the assessee that when the accounts of the A.Y. 2007-08 was audited on 11-02-2009, it was not possible to obtain the tax audit report u/s.44AB for A.Y. 2008-09 before 30-09-2008. Although the assessee could not substantiate with evidence the sudden leaving of the old Accountant and that the new Accountant took some time to understand the job but the fact remains that the accounts for preceding assessment year were audited only on 11-02-2009. Without the closing balance of the financial year 2006-07 the opening balance of the financial year 2007-08 cannot be verified. No auditor will audit the accounts of a subsequent year without having the audited accounts of the preceding assessment year. Therefore, there is some force in the argument of the assessee that without the audit of the accounts for A.Y. 2007-08 the audit of the accounts for A.Y. 2008-09 could not have been done. Further, the AO has completed the assessment on a total income of ₹ 533,87,720/- in the order passed u/s.143(3) on 14-12-2010 which is the income declared by the assessee in the revised computation of income. Thus we are of the considered opinion that this is not a fit case for levy of penalty u/s.271B of the I.T. Act. We therefore set aside the order of the CIT(A) and direct the AO to cancel the penalty - Decided in favour of assessee.
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