Supreme Court to Determine GST Eligibility for Immovable Property in August 23rd Hearing

No fine will be imposed under Section 271B of the Income Tax Act, 1961 for the delayed submission of the audit report due to insolvency and bankruptcy proceedings under the Income Tax Appellate Tribunal (ITAT) Delhi bench's ruling.

In the case of Bhushan Aviation Limited, the tax return was filed on March 29, 2019, during assessment proceedings, declaring a total income of zero and claiming losses. As a result, the taxpayer's case was selected for scrutiny.

During the assessment proceedings, the Assessing Officer initiated penalty proceedings for not submitting the audit report within the specified time. 

The taxpayer explained the reason for the delay, which the Assessing Officer did not accept. A penalty of Rs 1,50,000 was imposed under Section 271B of the Income Tax Act.

Unsatisfied with the decision, the taxpayer appealed to the Commissioner of Income Tax (Appeal) [CIT(A)], who upheld the dismissal of the taxpayer's appeal. Consequently, the taxpayer presented an appeal to the tribunal.

During the proceedings, Ashwani Kumar, the taxpayer's representative, stated that the delay in the taxpayer company's audit report was due to the parent company's involvement in insolvency and bankruptcy proceedings. This circumstance led to the delay in collecting evidence and compiling data.

According to Om Parkash, the revenue's attorney, the taxpayer, and its holding company are distinct legal entities, and the taxpayer was not under IBC proceedings.

After considering explanations from both sides, the tribunal found a valid reason for the delay in submitting evidence from the holding company due to IBC proceedings.

The bench, led by Kul Bharat (Judicial Member), ordered the removal of the penalty imposed by the assessing officer based on the information presented by both parties.

Also Read: Tax Saving Strategies For Small Businesses in India: 8 Best Strategies

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