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2020 (8) TMI 316 - AT - Income TaxPenalty u/s 271B - non-furnishing of the Audit Report before the specified date - violation of the provisions of section 44AB - Assessee contended that in terms of CBDT circular dated 21/05/2019, the assessee was not required to furnish physical copy of the Tax Audit Report under section 44AB to the Income Tax Department along with the return of income on or before the due date of furnishing of the return of income and no penalty was to be initiated or levied - HELD THAT:- From various provisions of Rules along with CBDT circulars, it is evident that during the relevant assessment year i.e. assessment year 2010-11, the assessee was not required to furnish the tax Audit Report along with the return of income and it was to be produced only on being asked by the Income Tax Authorities. The mandatory uploading of the Audit Report electronically has been made effective only from assessment year 2013-14. In the instant case before us, the assessee did not file return of income for the year under consideration on or before the due date of the filing of the return of income (i.e. 30/09/2010). The assessee filed return of income for the first time on 06.11.2017 in response to notice under section 148 of the Act issued by the Assessing Officer. During reassessment proceeding, the assessee furnished the tax Audit Report dated 2/09/2010. Assessee was required to get his books of accounts audited on or before the due date of filing of the return of income. There was no relaxation in getting the books of account audited by a Chartered Accountant and relaxation was given only for furnishing the Tax Audit Report. The requirement of furnishing the audit report before the specified date has been dispensed with for the relevant assessment year. But AO emphasized only on the fact Audit Report was not furnished on or before the due date of filing of return of income. He did not examine whether the books of account were audited before the due date of return of Income. He has even not verified authenticity of the Audit Report from the Chartered Accountant, whose name is appearing on the Audit Report. AO has not verified the records of the Chartered Accountant like, register of dispatch of Audit Report or team member engaged in Audit, records on the basis of which report was prepared, correspondence or comment of the assessee on the deficiencies pointed out by the team etc. AO has even not verified whether these details have been incorporated by the assessee in return of Income filed by the assessee on 06.11.2017. As the AO has failed in his duty in verifying whether books of account were audited before the specified date and only emphasized on the fact of furnishing the audit before the specified date , we do not find any reason for confirming the penalty levied u/s 271B - CIT(A) has insisted for obtaining the Audit report before the specified. We find that word “ obtain before” has been susctitued in section 44AB by the word “ furnish by” w.e.f 1-7-1995 and therefore for the relevant obtaining the report before the specified date is not relevant - we set aside the order of the learned CIT(A) and delete the penalty levied u/s 271B for violation of the provisions of section 44AB - Appeal filed by the assessee is allowed.
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