GOPINATH PALANI,CHENNAI V. ITO, NCW08(2), CHENNAI

ITA 3023/CHNY/2025

AI Insights

The case involves Gopinath Palani, the appellant, who appealed against the penalty imposed by the Income Tax Officer for not submitting the audit report within the prescribed time under Section 44AB of the Income Tax Act. The penalty was initially upheld by the Commissioner of Income Tax (Appeals), but upon further appeal to the Income Tax Appellate Tribunal, it was decided in favor of the appellant. The tribunal considered the circumstances presented by the appellant, including the hospitalization of a close relative, as a reasonable cause under Section 273B, which allows for relief from penalties if reasonable cause is shown for non-compliance.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 822457 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2017-2018
• Appeal Filed On: 30-10-2025
• Other Referred Cases: Lakshmi Card Clothing Manufacturing Co. (P.) Ltd. vs. Deputy Commissioner of Income-tax [2013] 35 taxmann.com 235 (Madras)/[2013] 216 Taxman 112 (Madras) (Mag.)/[2013] 353 ITR 544 (Madras)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARV SREENIVASAN
• Assessee Lawyers: N.V.KRISHNAN
• Keywords: Reasonable cause
• Section: 273B

Judgement Text

"आयकर अपीलीय अिधकरण, ’ड ’ \u000eयायपीठ, चे\u000eनई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH: CHENNAI \u0001ी मनु क ुमार िग र, \u000eाियक सद\u0012 एवं \u0001ी एस. आर. रघुनाथा, लेखा सद\u0012 क े सम BEFORE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER AND SHRI S.R.RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.3023/Chny/2025 िनधा\u0018रण वष\u0018/Assessment Year: 2017-18 Gopinath Palani, 236/900, Trunk Road, Poonamallee, Chennai – 600 056. v. Income Tax Officer, Non Corporate Ward-8(2), Chennai. [PAN: APJPG 8077P] (अपीलाथ /Appellant) ( यथ /Respondent) अपीलाथ क ओर से/ Appellant by : Mr. N.V.Krishnan, Advocate यथ क ओर से /Respondent by : Mr. ARV Sreenivasan,CIT सुनवाईक तार ख/Date of Hearing : 16.12.2025 घोषणाक तार ख /Date of Pronouncement : 22.12.2025 आदेश / O R D E R PER MANU KUMAR GIRI, JM: This appeal filed by the assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals) (NFAC) Delhi [CIT(A)] dated 22.08.2025 for Assessment Year 2017-18. 2. Brief facts of the case are that the assessee instituted appeal before the ld.CIT(A) against the penalty imposed u/s271B of the Act. On further appeal to Printed from counselvise.com ld.CIT(A), the ld. CIT(A) dismissed the appeal furnish the audit report within time prescribed time limit under section 44AB of the Act. He further holds that the has not shown any reasonable cause u/s 273B of the Act. Aggrieved, assessee is in appeal before 3. Before us, the ld. Counsel for furnishing of report was hospitalizes and he had to take ca the ld.CIT(A) and pleaded for the dismissal of the appeal 4. We have heard the rival submissions and perused interaction between Sections 273B and 44AB of the Income Tax Act, 1961 highlights an important balance in tax law between strict compliance and equity. Although Section 44AB requires c audit, the penalty prescribed under Section 271B for non imposed automatically. Section 273B acts as a safeguard by permitting relief from penalties where the assessee can establish that there w cause” for failing to comply with the audit obligation. 5. In the case of Lakshmi Deputy Commissioner of Income (Madras)/[2013] 216 Taxman 112 (Madras) (Mag.)/[2013] 353 ITR 544 (Madras)[15-06-2011], the the tax audit report could be excused due to the illness of the auditor. This ITA No.30 2 the ld. CIT(A) dismissed the appeal holding that the assessee failed to it report within time prescribed time limit under section 44AB of the Act. He further holds that the has not shown any reasonable cause u/s 273B Aggrieved, assessee is in appeal before this Tribunal. the ld. Counsel for assessee submitted that furnishing of report was on account of assesssee’s very close relative was hospitalizes and he had to take care of them. The ld.DR relied upon the order of the ld.CIT(A) and pleaded for the dismissal of the appeal. We have heard the rival submissions and perused interaction between Sections 273B and 44AB of the Income Tax Act, 1961 highlights an important balance in tax law between strict compliance and equity. Although Section 44AB requires certain taxpayers to undergo a mandatory tax audit, the penalty prescribed under Section 271B for non- imposed automatically. Section 273B acts as a safeguard by permitting relief from penalties where the assessee can establish that there w cause” for failing to comply with the audit obligation. Lakshmi Card Clothing Manufacturing Co. (P.) Ltd. vs. Deputy Commissioner of Income-tax [2013] 35 taxmann.com 235 (Madras)/[2013] 216 Taxman 112 (Madras) (Mag.)/[2013] 353 ITR 544 he Jurisdictional High Court ruled that a delay in filing e tax audit report could be excused due to the illness of the auditor. This ITA No.3022/Chny/2025 Gopinath Palani holding that the assessee failed to it report within time prescribed time limit under section 44AB of the Act. He further holds that the has not shown any reasonable cause u/s 273B reason for delayed on account of assesssee’s very close relative was The ld.DR relied upon the order of We have heard the rival submissions and perused the record. The interaction between Sections 273B and 44AB of the Income Tax Act, 1961 highlights an important balance in tax law between strict compliance and equity. ertain taxpayers to undergo a mandatory tax -compliance is not imposed automatically. Section 273B acts as a safeguard by permitting relief from penalties where the assessee can establish that there was a “reasonable Card Clothing Manufacturing Co. (P.) Ltd. vs. tax [2013] 35 taxmann.com 235 (Madras)/[2013] 216 Taxman 112 (Madras) (Mag.)/[2013] 353 ITR 544 High Court ruled that a delay in filing e tax audit report could be excused due to the illness of the auditor. This Printed from counselvise.com highlighted that the reasonable cause can extend to key professional personnel whose health issues directly impact the compliance timeline. 6. Hence, respectfully following the are of the view that the reason given by the assessee filing the audit report before the extended due date for filing the Tax Audit Report i.e; 07.11.2017. u/s.271B of the Act. 7. In the result, appeal of the assessee is allowed. Order pronounced on Sd/- (एस. आर. रघुना था ) (S.R.RAGHUNATHA लेखा सद)य/ACCOUNTANT MEMBER चे\u000eनई/Chennai, *दनांक/Dated: 22nd December EDN, Sr. PS आदेश क ितिल+प अ,े+षत/Copy to 1. अपीलाथ\u0007/Appellant 2. \b थ\u0007/Respondent 3. आयकरआयु\u000f/CIT, Chennai / Madurai / 4. िवभागीय\bितिनिध/DR 5. गाड\u0018फाईल/GF ITA No.30 3 highlighted that the reasonable cause can extend to key professional personnel whose health issues directly impact the compliance timeline. Hence, respectfully following the Jurisdictional High Court are of the view that the reason given by the assessee is a sufficient cause audit report before the extended due date for filing the Tax Audit i.e; 07.11.2017. Therefore, we delete the penalty imposed by the AO In the result, appeal of the assessee is allowed. Order pronounced on 22nd day of December, 2025 at Chennai. ) S.R.RAGHUNATHA) /ACCOUNTANT MEMBER Sd/ (मनु क ुमार (MANU KUMAR GIRI \u000eयाियक सद)य/JUDICIAL MEMBER mber, 2025. Copy to: , Chennai / Madurai / Salem / Coimbatore. ITA No.3022/Chny/2025 Gopinath Palani highlighted that the reasonable cause can extend to key professional personnel High Court judgment, we sufficient cause for not audit report before the extended due date for filing the Tax Audit penalty imposed by the AO 5 at Chennai. Sd/- क ुमार िग र) MANU KUMAR GIRI) /JUDICIAL MEMBER Printed from counselvise.com "