· Assessee society was registered u/s 12A and was claiming exemption u/s 11 of the Act.
· The AO did not allow assessee the exemption claimed u/s 11 vide its order passed u/s 143(3) of the Act, and further levied penalty of Rs.1,00,000/- on the assessee u/s 271B, stating that the assessee failed to get its accounts audited u/s 44AB of the Act.
· The CIT(A) further dismissed the appeal filed by the assessee.
· The Tribunal observed that the assessee society was registered u/s 12A for imparting education through its colleges and has been claiming exemption u/s 11 of the Act.
· The Tribunal, referring to the provisions of section 44AB of the Act, observed that the provisions of said section are applicable to the person carrying on business or profession. However, the assessee was undisputedly a charitable society and was not carrying out any business and has been claiming exemption u/s 11 of the Act. Thus, the penalty u/s 271B could not have been levied on the assessee.
· The Tribunal, thus, concluded that even if the exemption claimed by the assessee society u/s 11 was not granted by the AO in its assessment order, it could not burden the assessee to get its accounts audited with retrospective effect.
· Therefore, the Tribunal deleted the penalty imposed on the assessee u/s 271B of the Act.
For further reading, refer the attachment.
Further Reading