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2023 (5) TMI 1215 - ITAT DELHIPenalty u/s 271B - AO was not satisfied with the claim of exemption for the purpose of Section 10(23C)(iiiab) r.w.r. 2BBB - AO observed that the assessee university has not audited its account as per Clause (b) of sub-section (1) of section 12A despite the fact that its total income as computed under the Act without giving effect to the provisions of Section 12 exceeds the maximum amount which is not chargeable to Income Tax in F.Y. 2017-18 - whether violation of main part of the Section 44AB confirmed? HELD THAT:- Proviso of Section 44AB is not a default or charging provision rather is a beneficial provision for the any assessee whose accounts are audited under any other law other than the Act and such audited accounts if furnished with return will be considered as compliance of Section 44AB - AO has considered it to be a default Clause and erroneously introduced the default of audit u/s 12A(1)(b) to fall in the Proviso to Section 44AB. While in case there is a failure of audit for the purpose of Section 12A(1)(b) of the Act, then there is no penalty provision except that the Act provides that the concerned assessee shall not be entitled to the benefit of exempt income u/s 11 or 12. If the impugned order of CIT(A) is considered it appears that he introduced his own case as the Ld. AO had not found violation of main part of the Section 44AB for the reasons that the assessee university had gross receipts for the year under consideration above the prescribed limit of Rs. 60,00,000/- for mandatorily getting books of accounts audited as per provisions of Section 44AB of the Act but Ld. AO had taken shelter of Proviso to section 44AB and assumed as assessee University has not got the accounts audited for the purpose of Section 12A(1)(b) of the Act, this is a violation of Section 44AB of the Act. Tax Authorities below have fallen in grave error on facts and law while invoking the penalty provisions. Decided in favour of assessee.
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