Manish Pushkar Dayal Singhal v. Income-tax Officer: Penalty under section 271B was deleted because the assessee maintained a bona fide belief regarding turnover calculation thresholds for tax audit.

54. (2026) 189 taxmann.com 556 (Mum Trib)

Manish Pushkar Dayal Singhal v. Income-tax Officer

A.Y.: 2022-23 Date of Order : 12.08.2026

Sections: 271B, 44AB

Where the assessee bona fide believed that tax audit was not required since its turnover excluding GST was below audit threshold limit under section 44AB, in the absence of any evidence of deliberate or bona fide failure, such bona fide belief constituted reasonable cause and therefore penalty under section 271B was to be deleted.

FACTS

The assessee, an individual running the proprietary concern was engaged in manufacturing and selling packaging materials, filed his return for A.Y. 2022-23 declaring income of about Rs. 3.73 lakhs.

The assessment under section 143(3) read with section 144B was completed without variation. During assessment, the Assessing Officer noted from the assessee's GSTR-1 that the total invoice value was about Rs. 11.59 crores inclusive of GST, exceeding the Rs. 10 crore threshold under section 44AB, whereas the Profit & Loss account reflected sales of about Rs. 9.82 crores net of taxes. Referring to section 145A