Clarification regarding penalty under section 271B for failure to comply with provisions of section 44AB for assessment year 1985-86
1. The Board had vide Circular No. 422, dated 19-6-1985 (see Clarification 2) decided that the penalty proceedings under section 271B of the Income-tax Act, 1961, for failure to comply with the provisions of section 44AB should not be initiated for assessment year 1985-86, in cases where :
(i) the Audit Report prescribed under section 44AB read with rule 6G has been obtained by 30th September, 1985; and
(ii) the self-assessment tax under section 140A of the Act has been paid within the normal period prescribed under section 139(1) of the Act for filing return of income.
Subsequently, on receipt of representations, the matter was reconsidered and Circular No. 582 was issued on 23-10-1990 clarifying that no penalty would be imposed for the assessment year 1985-86 under section 271B in cases where the audit report prescribed under section 44AB read with rule 6G had been obtained by 30th September, 1985.
2. The matter has been reconsidered by the Board in consultation with the Ministry of Law and it has been decided to withdraw the Circular No. 582, dated 23-10-1990. [Clarification 1].
Circular : No. 628, dated 6-3-1992.