Case Law Details
ACIT Vs Haneefa Sahib Shajahan (ITAT Chennai)
The ITAT, Chennai in the Assistant Commissioner of Income Tax, v. Haneefa Sahib Shajahan, [I.T.A. No.931/Chny/2022 dated January 24, 2023] has upheld the decision of the Appellate Authority, deleting the penalty levied for failure to get accounts audited as per Section 271B of the Income Tax Act, 1961 (“the IT Act”) and for filing tax audit report belatedly, on the grounds that the assessee was prevented by reasonable cause due to its pathetic condition and heavy losses incurred in its business.
Facts:
Haneefa Sahib Shajahan (“the Respondent”) had filed its Income Tax Returns on March 24, 2018 for the Assessment Year (“A.Y.”) 2017-18 claiming the loss of INR 51,19,878/-. The case was selected for scrutiny and the assessment was completed under Section 143(3) of the IT Act.
However, as the audit report was filed beyond the due date, penalty proceedings were initiated by the Revenue Department (“the Appellant”) under Section 271B of the of the IT Act. In the penalty proceedings, the Appellant noted that the Respondent’s gross receipts in the A.Y. 2017-18 were to the tune of INR 27,17,11,367/- which was above the threshold of INR 1 crore, hence, the Respondent was required to get its accounts audited under Section 44AB of the IT Act before the due date. However, the Respondent had not filed the tax audit report under Section 44AB of the IT Act before the due date, and thus, the Appellant levied penalty of INR 1,50,000/- under Section 271B of the IT Act.
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