No bar prohibiting simultaneous penalty u/s 271B and 271A of Income Tax Act

There is no bar in penalty u/s 271B for non-audit u/s 44AB if penalty u/s 271A is also levied for non-maintenance of books of accounts u/s 44AA – ITAT

In a recent and interesting judgment, Guwahati ITAT has held that section 271B of the Income Tax Act does not prescribe any precondition that if penalty u/s 271A of the Act is levied for non-maintenance of books of accounts u/s 44AA then the penalty u/s 271B of the Act for non-auditing of accounts u/s 44AB cannot be levied.

ABCAUS Case Law Citation:
4990 (2026) (01) abcaus.in ITAT

In the instant case, the assessee had challenged the order passed by the CIT(A), National Faceless Appeal Centre in upholding the penalty levied by the Assessing Officer u/s 271B of the Income-tax Act, 1961 (the Act).

During the course of assessment proceedings, the assessee himself conceded that he had not maintained books of accounts and during the course of appellate proceedings, it was also conceded in his statement of facts submitted before the CIT(A) too.

However, the turnover of the assessee excluding GST and the income reported in the income tax return was more than the specified limits to maintain the books of accounts as per section 44AA of the Act and tax audit under section 44AB of the Act. The assessee was required to maintain the books of accounts as per section 44AA of the Act and was also required to get his books of account audited as per section 44AB of the Act.

The Tribunal observed that the assessee had contested that his income being exempt u/s 10(26) of the Act, he was not required to maintain the books of accounts was not correct as the assessee, per the statement of facts stated that he was prevented from sufficient cause from maintaining regular books of accounts.

The Tribunal opined that the failure to get accounts audited u/s 44AB of the Act and failure to keep maintained books of account u/s 44AA of the Act are two separate and independent acts of failure and does not depend upon each other. Moreover, the conditions prescribed in section 44AA of the Act to keep and maintained books of account are different then the conditions prescribed in section 44AB of the Act to get accounts audited.

The Tribunal further opined that section 271B of the Act does not prescribe any precondition that if penalty u/s 271A of the Act is levied for non-maintenance of books of accounts as required u/s 44AA of the Act and then the penalty u/s 271B of the Act for non-auditing of accounts provided u/s 44AB of the Act cannot be levied.

Accordingly, the Tribunal upheld the CIT(A) in confirming the penalty levied by the AO u/s 271B of the Act. 

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