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2022 (10) TMI 351 - AT - Income TaxPenalty levied u/s. 271B - assessee not getting its account audited u/s. 44AB - consistent stand of the assessee is that he has not maintained any books of account and no question of Audit Report u/s. 44AB and consequently penalty cannot be levied u/s. 271B - HELD THAT:- The imposition of penalty u/s 271B of the Act is not mandatory, rather it is discretionary, because if the assessee proves that there was a “reasonable cause” for the said failure, then the AO ought to have considered the same and then proceed with levying penalty. 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 Ld. CIT(A) and levied penalty u/s. 271B - The discretion available u/s. 273B is not exercised by the Lower Authorities. We have no hesitation in deleting the penalty levied u/s. 271B of the Act. - Decided in favour of assessee.
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