ISSUE FOR CONSIDERATION
A failure to get accounts audited or to obtain and furnish the audit report as required under section 44AB is made liable to a penalty under section 271B of a sum equal to 0.5 per cent of the total sales, turnover or gross receipts of business or profession subject to a ceiling of Rs. 1,50,000.
The provision of section 271B, introduced by the Finance Act, 1984, has undergone various changes from time to time, including the omission of the words “without reasonable cause” with effect from 10th September, 1986. Presently, the failure to get the accounts audited or to obtain and furnish an audit report, as required under section 44AB, are made liable to penalty subject to the discretion of the AO. Section 273B provides that no penalty shall be imposable where the person proves that he had a reasonable cause for the failure specified under section 271B. Section 274 provides that no order imposing a penalty shall be made unless the Assessee has been heard or is given a reasonable opportunity of being heard.
Section 44AA read with Rule 6F requires maintenance of books of account and other documents to enable the AO to compute the total income in accordance with the provisions of the Act. Failure to keep and maintain the books of account and other documents as required by section 44AA is made liable to penalty under section 271A of a sum of Rs. 25,000 with effect from 1st April, 197
