Kalaiarasan Selvaraj Vs ITO (ITAT Chennai)
The appeal was filed by the assessee against the order of the Commissioner of Income Tax (Appeals)/NFAC dated 10.11.2025 for AY 2020-21, confirming the penalty levied under Section 271B of the Income Tax Act, 1961 for non-filing of the Tax Audit Report (TAR) under Section 44AB.
The assessee, an individual, filed the return of income on 12.09.2024 in response to a notice issued under Section 148. The return was accompanied by the Tax Audit Report and declared total income of ₹5,59,460. The Assessing Officer accepted the returned income by an assessment order dated 27.12.2024 passed under Sections 147 read with 144B. Thereafter, the Assessing Officer initiated penalty proceedings under Section 271B on the ground of belated filing of the Tax Audit Report.
In response to the penalty notice, the assessee submitted that the Tax Audit Report had been filed along with the return of income on 12.09.2024, well before completion of the assessment on 27.12.2024, and therefore the delay should not attract penalty. The Assessing Officer rejected the explanation and levied a penalty of ₹1.50 lakh under Section 271B. The Commissioner (Appeals) upheld the penalty.
The Tribunal noted that the Tax Audit Report had been filed before completion of the reassessment and was available to the Assessing Officer when the assessment order was passed. It held that the failure to file the report within the prescribed due date constituted only a technical breach.
