2023 (2) TMI 157

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..... 4.03.2018 for the assessment year 2017-18 claiming loss of Rs..51,19,878/-. The case was selected for scrutiny under CASS. The assessment was completed under section 143(3) of the Income Tax Act, 1961 ["Act" in short] by accepting the returned income. Since the audit report was filed beyond the due date, the Assessing Officer has initiated penalty proceedings and issued notice under section 271B the Act dated 10.03.2021. In the penalty proceedings, the Assessing Officer has noted that during the relevant assessment year, the total gross receipts were to the tune of Rs..27,17,11,367/-, which is more than Rs.. 1 crore and therefore, the assessee was liable to file the tax audit report as required under section 44AB of the Act before the due d .....

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..... ns of the appellant. The facts of the appellant's case are similar to those of Attinkara Electronics vs. ITO, Thiruvalla cited supra. In that case too, the assessee had got his books of accounts audited, though belatedly, but the audit report was produced before the AO before completion of the assessment. The Hon'ble ITAT Cochin Bench, relying on various decisions had held that the assessee had only committed a technical venial breach which did not cause any loss to the exchequer. The Bench also held the ill-health of the partner and the malfunctioning of the computer system to be reasonable causes for not furnishing the audit report before the AO within the stipulated time. The ratio laid down in the case of Attinkara Electronics v .....

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..... has observed that the books of accounts audited, though belatedly, but the audit report was produced before the Assessing Officer before completion of the assessment. Since the assessee was prevented by reasonable cause for not getting her books of accounts audited in time as required under the provisions of section 44AB of the Act, but filed the tax audit report before completion of the assessment, the ld. CIT(A) has held that it is not a fit case for the levy of penalty under section 271B of the Act and accordingly, the penalty levied was deleted. We find no infirmity in the order passed by the ld. CIT(A) and thus, the appeal filed by the Revenue is dismissed. 7. In the result, the appeal filed by the Revenue is dismissed. Order pronou .....

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