Penalty of Rs. 1L imposed under Income Tax Act for Non Completion of Audit on Time: Supreme Court sets aside Penalty [Read Judgement]

The Supreme Court nullified a Rs. 100,000 penalty under the Income Tax Act for audit non-completion within the stipulated time. \r

The appeal stemmed from a Bombay High Court ruling. Laurel Wires Ltd, engaged in wire and cable manufacturing, faced allegations of failing to file audit reports despite a search by the Directorate General of Central Excise Investigation. Despite a notice under Section 148, the appellant remained unresponsive. \r

The Income Tax Appellate Tribunal upheld the penalty due to the Appellant's failure to file audited returns despite earning over Rs. 26 Crores. The High Court, concurring with the Tribunal, imposed a Rs. 100,000 cost. The Supreme Court annulled this cost but upheld the rest of the High Court's decision.