Sec. 44AB & 271B of Income-tax Act, 1961— Penalty—Penalty under s. 271B cannot be levied for non-audit as prescribed under s. 44AB.

Facts: Assessee went on appeal before Tribunal and raised the ground in respect of penalty imposed by the AO under s. 271B. This penalty was imposed for this reason that the assessee did not furnish tax audit report for these years as required under s. 44AB.

Held, that Tribunal followed a judgment of Hon’ble Karnataka High Court rendered in the case of CIT Anr. vs. Babu Reddy (2010) 38 DTR (Kar) 147 in which it was held that since no format of books of accounts were prescribed under the rules for Civil Contracts, Penalty under s. 271A is not justified. He submitted that when no penalty under s. 271A is leviable, Penalty under s. 271B also cannot be levied for non-audit as prescribed under s. 44AB. Therefore, respectfully following the same, we delete the penalty under s. 271B in all these six years. - HARSHVARDHAN V/s DY. CIT - [2020] 206 TTJ 894 (ITAT-BANGALORE)