sec 274B

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 January 2010 Dear sirs/friends
I am a student of pcc.
I got a problem of penalty u/s 271B Failure to get accounts audited..
My question is that if audit report sign on 15 sep, 2009 and filling is made on 2 jan, 2010 than is it attract penalty u/s 271B?

Any clarification in this regard greatly obliged. If there is any case law or circular please attach with reply.

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
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05 January 2010 Even then it attracts penalty. If you refer the section it says that tax audit report should be submitted on or before the due date for filing of return.

Querist : Anonymous

Querist : Anonymous (Querist)

06 January 2010 But sir sec 271B say
"if any person [u]fails to get accounts audited[/u] in respect of any previous year or years relevant to an assessment year or [furnish a report of such audit as required u/s 44AB] the A.O. may direct......"

but here audit is made with in time i.e 15 sep.
Than why penalty imposed?
please clarify in details. if any case law in this regard please quote that.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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23 July 2025 Your query is about **penalty under Section 271B** of the **Income Tax Act**, specifically concerning the failure to get accounts audited under Section 44AB, and whether it applies when the audit report is signed on **15th September 2009**, but the return is filed later on **2nd January 2010**.

### **Understanding Section 271B:**

Section 271B imposes a penalty on a person who fails to get their accounts audited as per the requirement of Section 44AB, or fails to **furnish** the audit report within the stipulated time.

### **Key Requirements of Section 44AB:**

1. **Mandatory Audit Requirement (Section 44AB)**: A person is required to get their accounts audited if their **turnover** or **gross receipts** exceed a specified threshold (₹1 crore for businesses and ₹50 lakh for professionals, as of the current thresholds).
2. **Due Date for Filing of Return**: The **audit report** must be submitted before the due date for filing the return of income. For example, for a taxpayer whose financial year ends on **31st March 2009**, the due date for filing the return is generally **30th September 2009** (for individuals, HUFs, and firms other than LLPs).

### **Your Case:**

* **Audit Report Signed**: 15th September 2009.
* **Return Filed**: 2nd January 2010.

**Key Issue**: The audit report was signed by 15th September, which is within the deadline for **getting the accounts audited**. However, the return was filed on **2nd January 2010**, **long after the due date** for filing the return (which was **30th September 2009**).

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### **Analysis:**

* **Section 271B** talks about **failure to get accounts audited** or **failure to submit the audit report**.

* **Section 44AB** mandates the submission of the audit report **on or before** the **due date for filing the return of income**.
* In your case, **even though the audit report was signed on time**, the return was filed **late**, i.e., after the due date.
* The **penalty** under Section 271B is typically imposed if the **audit report is not submitted** on or before the **due date of filing the return**.

* Since the audit report was signed on time, the real issue is the **late filing of the return**.

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### **Clarification on Penalty:**

* According to **Section 271B**, the penalty is imposed if the person fails to comply with **Section 44AB**, i.e., either by **not getting the accounts audited** or **not furnishing the audit report** on time.

* **Late Filing of Return**: If the **audit report** is submitted late, or the return is filed late, the **penalty** is triggered.

* **Penalty Imposition**: Since the return was filed after the due date (**30th September 2009**), a **penalty under Section 271B** could be levied by the Assessing Officer, regardless of the fact that the audit report was signed on time.

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### **Penalty Calculation:**

The penalty under **Section 271B** is a **minimum of 0.5% of the total sales, turnover, or gross receipts**, subject to a maximum of ₹1,50,000.

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### **Relevance of Case Laws and Circulars:**

While there are no specific circulars or landmark case laws that directly address this exact issue, the **general interpretation** of **Section 271B** and **Section 44AB** suggests that the **penalty is linked to the filing of the return**, and not just the audit itself.

### **Possible Relief:**

* **Late Filing of Return Relief**: If the delay in filing the return is for a reasonable cause, the taxpayer may file an application for **condonation** of delay under **Section 119** or **Section 234A**. However, this is more relevant for interest under Section 234A than for penalty under Section 271B.
* **Waiver or Reduction of Penalty**: You may also request the Assessing Officer for **waiver or reduction** of penalty, especially if the audit report was completed on time, and the delay was due to circumstances beyond your control.

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### **Conclusion:**

The **penalty under Section 271B** could still be imposed despite the **audit report being signed on time** because the return was filed after the due date. The **law requires the audit report** to be submitted **before the due date for filing the return**. **Filing the return after the due date** is considered **non-compliance**, and thus attracts a penalty under Section 271B.

If you feel the delay was due to valid reasons, you could approach the Assessing Officer to seek some relief.

Let me know if you need more detailed help with any case law or further clarifications!

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