No Penalty if Tax Audit report not filed electronically : ITAT

No Penalty if Tax Audit report not filed electronically

Facts of the case

it is an admitted fact that the assessee did not have good relationship with its auditors before the end of the financial year. It has filed complaint against its earlier auditor

Subsequently, it has engaged another CA and furnished audit report before the completion of the assessment (after 2 years from relevant Assessment year).

Thus the delay in filing tax audit report has occurred due to strained relationship with its earlier auditor.

View of Tax authroties : Assessee should have appointed new CA immediately after knowing misdeeds of earlier CA.

Decision of ITAT

Te tax audit report has been filed with the AO before completion of assessment. The tax authorities have mentioned about non-filing of tax audit report electronically. We notice that the provisions of Income Tax Act do not mention about the same.

Hence non-filing of audit report electronically cannot be the reason for imposing penalty u/s 271B of the Act.