Vellakovil Primary Agricultural Cooperative Bank Limited Vs. The Income Tax Officer - (Income Tax Appellate Tribunal) (23 Jun 2023)

Penalty cannot be levied under Section 271B of the IT Act for venial technical breach without any mala fide intention

MANU/IX/0252/2023

Direct Taxation

Present appeals filed by the assessee are directed against separate but identical orders of the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, passed under section 271B of the Income Tax Act, 1961 [IT Act].CIT(A) confirmed the penalty levied under section 271B of the IT Act.

Since the assessee has not filed the tax audit report under section 44AB of the Act before the due date, the Assessing Officer levied penalty under section 271B of the Act, which was confirmed by the learned CIT(A). It was submitted that, the assessee was unable to file the ROI along with tax audit report within the date stipulated in the notice under section 148 of the Act due to Covid pandemic lock down and income tax portal was under maintenance, and the assessee has filed the tax audit report under section 44AB of the Act during the course of assessment proceedings, which was also considered by the Assessing Officer before concluding the assessment. Thus, when the Tax Audit Report was made available to the Assessing Officer before completion of assessment proceedings, then for venial technical breach without any mala fide intention of the assessee, the penalty cannot be levied under section 271B of the Act.

In view of decision of the Coordinate Benches of the Tribunal in the case of Balaji Logistics v. ACIT for the assessment year 2015-16, present Tribunal is of opinion that it is not a fit case for levy of penalty under section 271B of the Act and accordingly, the penalty levied under section 271B of the Act stands deleted for the assessment years 2013-14, 2014-15, 2015-16 and 2016-17. Appeals filed by the assessee are allowed.

Tags : ASSESSMENT PENALTY LEGALITY