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2019 (3) TMI 1466 - HC - Income TaxPenalty u/s 271B - delay caused in complying with the provisions of Section 44AB - delay in filing the audit report along with the returns - HELD THAT:- 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. The provision of Section 273B 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, 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 existence of reasonable cause under Section 271B - Decided in favour of the assessee
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