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TMI Blog2019 (3) TMI 1682X X X X Extracts X X X X X X X X Extracts X X X X ..... total income of Rs. 7,09,690/-. As per the profit and loss account furnished along with the return, the assessee had turnover of Rs. 22,07,67,094/- during the AY 2012-13. As the total turnover of the business exceeded Rs. 40 lakhs in the previous year, the assessee was liable to get his accounts audited before the specified date. As the assessee had failed to get the accounts audited u/s. 44AB of the Act, the Assessing Officer after rejecting the explanation of the assessee levied penalty u/s. 271B of the Act amounting to Rs. 1,50,000/- by observing as under: "As the assessee failed to get his accounts audited and to furnish the report of such audit before the specified date as required under section 44AB of the Income Tax Act, 1961, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... direct that the assessee shall pay, by way of penalty, a sum of Rs. 1,50,000/- which being less than the sum equal to one half percent of the total sales of Rs. 22,07,67,094/- in the previous year relevant to Assessment Year 2012-13, Accordingly I, the undersigned, do hereby impose a penalty of Rs. 1,50,000/- as per Sec.271B of the Act. This should be paid as per the demand notice and challan enclosed herewith." 4. Before the CIT(A), the filed a letter 10.04.2015, explaining the reasons for the delay in getting the accounts audited as follows: a) Ill health of the partner Mr. Naushad S from 20.09.2012 to 19.10.2012 supported by Medical Certificate dated 19.10.2012 b) At the time of finalization on 25.10.2012 there was a hardware da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A), levy of such penalty is subject to provisions of section 273B of Income Tax Act, 1961. As per the provisions of section 273B, it is for the assessee to prove that there was reasonable cause for failure to get the accounts audited as required under section 44A8. The CIT(A) observed that the claim of ill health of the partner as a reasonable cause was not valid for the delay in getting the accounts audited since the delay was on account of loss of data due to hardware damage of the computer. 5.1 On perusal of the certificate issued as above, the CIT(A) found that the contents of the letter did not indicate that the one desktop computer which got damaged was containing accounts data of the assessee. Further, according to the CIT(A), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITO (23 CCH 646) wherein it was held that even though assessee could not get the accounts audited within time but having filed the audit report along with the return, no penalty u/s. 271B was attracted. Further, illness of one of the partners constituted reasonable cause for the delay. He also relied on the recent decision of this Tribunal in the case of Johns Biwheelers vs. ACIT in ITA No.411/Coch/2018 dated 05/02/2019 wherein it was held as under: "7. We have heard the rival submissions and perused the record. In this case, the assessee was required to get his books of account audited and filed along with the return of income u/s. 44AB within the due date of 30/09/2012 for the assessment year 2012-13.. However, the audit report was fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. We observe that this judgment was rendered in the context of adjudication of quantum of deduction claimed by the assessee. Hence, the said analogy can very well be drawn and used in the penalty proceedings like that of the assessee. To sum up, we hold that the assessee had committed only technical venial breach for which he cannot be penalized. In view of the above, we are inclined to delete the penalty made by the assessee u/s. 271B of the Act. 8. In the result, the appeal of the assessee is allowed. 8.1 In our opinion, the case of the assessee will squarely fit into the ratio laid down in the above cases cited supra. The assessee has comitted only technical venial breach which does not create any loss to the exchequer. The audit r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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