271B Penalty Notice Reply Format 2026
To,
{{officer_designation}}
Date: 1 October 2026
Reply to Show-Cause Notice under Section 274 read with Section 271B of the Income-tax Act, 1961
Assessee: {{client_name}} | PAN: {{client_pan}} | Assessment Year: {{assessment_year}}
Ref: Show-cause notice dated
Respected Sir / Madam,
1. We act as the authorised representative of the above assessee (letter of authority enclosed) and submit this reply to the captioned notice, which proposes a penalty under section 271B for the alleged failure to get the accounts audited / to furnish the report of audit under section 44AB for AY {{assessment_year}} by the specified date.
A. Facts
| Particulars | Details |
|---|
| Nature of business / profession | ____________ |
| Total sales / turnover / gross receipts for the year | ₹ {{turnover}} |
| Clause of section 44AB attracted | ____________ [44AB(a) business / 44AB(b) profession / 44AB(e)] |
| Specified date for furnishing the audit report | {{audit_due_date}} |
| Date the audit report was signed by the auditor | ____________ |
| Date the audit report (Form 3CA / 3CB – 3CD) was furnished on the portal | {{audit_report_date}} |
| Period of delay | ____________ days |
| Date of filing the return of income | ____________ |
| Whether the report was on record before the return was processed / assessment made | ____________ |
B. Reasonable cause — section 273B
2. Section 273B provides that no penalty shall be imposable under section 271B if the assessee proves that there was reasonable cause for the failure. The assessee submits that the delay was caused by circumstances it could not, acting with ordinary care, have avoided: ____________ [state the cause in two or three sentences].
3. The chronology, with the evidence for each event, is:
| Date | Event | Evidence (annexure) |
|---|
| ____________ | ____________ [e.g. accountant in charge of the books hospitalised] | ____________ [discharge summary] |
| ____________ | ____________ [e.g. books of account completed and handed over to the auditor] | ____________ [email / handover note] |
| ____________ | ____________ [e.g. upload attempted; portal error; grievance raised] | ____________ [screenshot / grievance ticket no.] |
| ____________ | Audit report signed by the auditor | ____________ |
| {{audit_report_date}} | Audit report furnished on the e-filing portal | Acknowledgement |
- Drafting hint — causes that have generally been accepted when backed by evidence: serious illness or death of the proprietor, a partner or the person keeping the books; fire, flood or seizure of records; resignation or incapacity of the auditor close to the date; delay in the completion of a statutory audit under another law on which the tax audit depends; failure of the e-filing portal on the last days (keep screenshots and the grievance number).
- Drafting hint — causes that generally fail: pressure of work, staff shortage, the auditor's busy season, and a bare statement that the books were not ready. If that is the real reason, look for the underlying event that made the books late and prove that.
- Drafting hint: account for every week between the specified date and the date of furnishing. A good cause that ended in October does not explain a report furnished in January.
C. Further submissions, without prejudice
4. Without prejudice to the above and to one another, the assessee submits:
(a) Audit completed in time; only the furnishing was late — the accounts were audited and the report was signed on ____________, before the specified date. The delay is only in uploading the report. The object of section 44AB — that audited accounts be available to the Assessing Officer — was met, and the report was on record before the return was processed. The breach is technical and has caused no loss to the revenue.
(b) Bona fide belief that audit was not required — the assessee believed in good faith that section 44AB did not apply because ____________ [e.g. turnover was within the higher threshold as cash receipts and payments were each below five per cent; the receipts were treated as falling under presumptive taxation; turnover from derivative transactions was computed on the basis then understood]. The belief was reasonable on the facts and the accounts were audited as soon as the position became clear.
(c) Quantum — without prejudice, the penalty cannot exceed one-half per cent of the total sales, turnover or gross receipts, or ₹1,50,000, whichever is less. On turnover of ₹ {{turnover}} the maximum is ₹ ____________. ____________ [state if the turnover adopted in the notice is wrong — e.g. it includes GST, or receipts that are not turnover].
(d) Limitation — the assessee craves leave to contend that any order passed beyond the period allowed by section 275 is barred by limitation.
- Drafting hint: keep clause (a) or clause (b), not both — they are different cases. Clause (a) is the "audited in time, uploaded late" case; clause (b) is the "did not think audit applied" case.
- Drafting hint: where no books were maintained at all, the default is under section 271A (failure to keep books), and there is authority that a section 271B penalty cannot then follow for not getting non-existent books audited. Check the current position in your jurisdiction before taking the point.
PRAYER
5. In view of the reasonable cause shown, it is prayed that the penalty proceedings under section 271B be dropped. If any adverse view is proposed, the assessee requests a personal hearing (including through video conferencing) before any order is passed.
Thanking you,
Yours faithfully,
For {{firm_name}}
Chartered Accountants
Firm Registration No.:
_______________________________
{{engagement_partner}}
Partner | Membership No.: {{icai_membership_no}}
Authorised Representative of {{client_name}}
Encl.: Letter of authority; audit report with acknowledgement of furnishing; return acknowledgement; evidence of the cause of delay as per the chronology; ____________
