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2022 (10) TMI 944 - AT - Income TaxPenalty levied u/s. 271B - failure to get accounts audited - determination of turnover - accommodation entries - reasonable cause for the said failure - assessee had turnover which exceed the limit as per the provisions of Section 44AB but not the commission income - HELD THAT:- Parliament has used the words "may" and not "shall", thereby making their intention clear in as much as that levy of penalty is discretionary and not automatic. The said conclusion is further justified by Section 273B namely “penalty not to be imposed in certain cases”. A careful reading of Section 273B encompasses that certain penalties "shall" be imposed in cases where "reasonable cause" is successfully pleaded. It is seen that penalty imposable u/s 271B is also included therein. By the said provisions, the Parliament has unambiguously made it clear that no penalty "shall be" imposed, if the assessee "proves that there was a reasonable cause for the said failure". As noticed, if the statutory provision shows that the word "shall" has been used in Section 271B, then the imposition of penalty would have been mandatory. Section 271B as extracted above further throws light on the legislative intent as it specifically provides that no penalty "shall’ be imposed if the assessee proves "that there was reasonable cause for the said failure". In the facts of the present case, it is seen that the explanations offered by the assessee have been ignored by the Assessing Officer as well as CIT(A) and levied penalty u/s. 271B of the Act. The discretion available u/s. 273B is not exercised by the Lower Authorities. For the reasons stated in the previous paragraph, we have no hesitation in deleting the penalty levied u/s. 271B of the Act. Grounds raised by the Assessee is allowed.
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