In ITA No.1136/Bang/2022-ITAT- Penalty under Section 271B of the Income Tax cannot be imposed for non-furnishing of audit report, if the assessee has not maintained books of account: ITAT (Bangalore)
Members George George K (Judicial) and Laxmi Prasad Sahu (Accountant) [30-03-2023]

Read Order: Maranaikana Halli Jayashella Shetty Pradeepkumar v. The Assistant Commissioner of Income-tax, Circle 1(1)

LE Correspondent

Bangalore, April 20, 2023: Deleting the penalty imposed u/s 271B of the Income Tax Act, the Bangalore bench of ITAT has ruled that since the assessee had not maintained books of account, penalty imposed u/s 271B of the Income Tax Act for non-furnishing of audit report does not arise.

Taking note of the decisions of the Gauhati High Court in the case of Surajmal Parsuram Todi v. CIT [LQ/GauHC/1996/304] and the Allahabad High Court in the case of CIT v. Bisauli Tractors [LQ/AllHC/2007/1295], wherein the High Courts have held that if a person has not maintained books of account, the question of audit does not arise, the Tribunal said, “when the assessee has admittedly not maintained the books of account, there is no question of getting the books of account audited u/s 44AB. Therefore, imposition of penalty for non-furnishing of audit report u/s 271B does not arise.”