Section 271B Audit Penalty tax audit missed — defend the penalty.
Section 271B imposes penalty for failure to get accounts audited under Section 44AB or to furnish the audit report by the due date. The penalty is 0.5% of turnover or gross receipts, capped at ₹1,50,000 — but it can often be avoided if reasonable cause is shown.
Section 271B of the Income Tax Act imposes penalty when a person liable to tax audit under Section 44AB fails to either get the accounts audited or furnish the audit report by the prescribed due date. The penalty is 0.5% of total turnover, gross receipts, or sales, subject to a maximum of ₹1,50,000.
However, penalty under Section 271B is not automatic. Section 273B of the Act provides that no penalty shall be imposable if the assessee proves that there was reasonable cause for the failure. Reasonable cause is a question of fact — illness of accountant, technical issues, partner death, natural calamity, first-time application of audit provisions, and similar circumstances have all been accepted in various judgments.
Our 271B defence is built on Section 273B — we identify the reasonable cause specific to your situation, document it properly, draft a comprehensive reply to the show-cause notice with supporting evidence and judicial precedents, and represent you before the AO and in appeal where required. Many 271B penalties are successfully dropped or reduced with the right defence.
Our 271B Defence Services
Show-Cause Reply
Drafting a detailed reply to the 271B show-cause notice with reasonable cause defence under Section 273B.
Reasonable Cause Documentation
Compilation of evidence supporting the reasonable cause — medical records, system failures, communications.
Judicial Precedents
Citation of ITAT and High Court precedents where penalty under 271B has been dropped on similar facts.
Personal Hearing Representation
Representation before the Assessing Officer at penalty hearings with structured oral submissions.
Penalty Order Review
Detailed review of the penalty order with merit memo for appeal or rectification.
Appeal before CIT(A)
Filing of appeal under Section 246A where penalty is wrongly levied or quantum is excessive.
Further Appeal at ITAT
Onward appeal before the ITAT where CIT(A) confirms the penalty.
Quantum Defence
Defence on quantum — ensuring penalty is computed correctly on turnover and within the ₹1,50,000 cap.
Our 271B Approach
Show-Cause Review
Study of the 271B show-cause notice and identification of the alleged default.
Cause Building
Identifying and documenting the reasonable cause that fits the assessee's circumstances.
Reply Drafting
Detailed reply with documentary annexures and case-law support filed before the AO.
Hearing Representation
Appearing for personal hearings and answering AO queries in detail.
Order & Appeal
Review of penalty order and filing appeal where penalty is wrongly confirmed.
Why Defence Works
Frequently Asked Questions
Section 271B imposes penalty on persons liable to tax audit under Section 44AB who fail to get accounts audited or furnish the audit report by the due date — at 0.5% of turnover, capped at ₹1,50,000.
Yes. Section 273B provides that no penalty shall be imposed if the assessee proves reasonable cause for the failure. Reasonable cause is decided on the facts of each case.
Illness of partner or accountant, technical issues with the portal, first-year audit applicability, natural calamity, and similar circumstances have been accepted as reasonable cause in various judicial decisions.
Yes. Penalty orders under Section 271B are appealable before the Commissioner of Income Tax (Appeals) under Section 246A within 30 days, and thereafter before the ITAT.
No. Section 271B applies only to persons liable to tax audit under Section 44AB. If you are not covered by 44AB, no 271B penalty arises.
271B Show-Cause or Penalty Order?
Reasonable cause defence under Section 273B can often save the penalty entirely. Talk to our team for a structured defence at every stage.
Defend a 271B Penalty or call +91 9819 000 511