×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
This appeal at the instance of Assessee pertaining to A.Y. 2011-12 is directed against the order of Commissioner of Income Tax(Appeals), Ujjain, (in short ‘CIT’), dated 26.09.2018 which is arising out of the order u/s 271B of the Income Tax Act 1961(hereinafter called as the ‘Act’) framed on 29.06.2017 by ITO, Ujjain.
2. The assessee has raised following grounds of appeal:
“That on the facts and circumstances of the case, the Ld. CIT(A)erred in confirming penalty u/s 271B of the Act at Rs.35,830/-. Levied by the Ld. ITO-1(2) Ujjain.”
3. Briefly stated facts as culled out from the records are that the assessee is an individual running sole proprietorship concern in the name of M/s Shitla Textiles engaged in the business cloth trading. Assessee’s case was re-opened by issuance of notice u/s 148 of the Act duly served upon the assessee on 15.04.2015. In response thereto, the return of income was filed on 15.05.2015 declaring income of Rs.1,79,130/-. Notice u/s 143(2) of the Act duly served upon the assessee. The assessee was asked to explain the source of cash deposit of Rs. 49,48,9900/- in the same bank account hold with IDBI bank. The assessee submitted that the alleged amount was collected from the “Feriwalas” against cloth supplied to them and commission @ 1% was earned on purchased clothes. Income from commission has been duly offered to tax. The total turnover of the assessee including the commission income was below the limit of tax audit provided u/s 44AB of the Act.
4. Ld. Assessing Officer, however, brushed aside the submissions of the assessee and computed net profit of the wholesale business @9.1% on the undisclosed turnover of Rs.49,48,900/- and made addition of Rs.4,50,350/-.
5. Ld. AO also initiated the penalty proceedings u/s 271B of the Act for not getting account u/s 44AB of the Act since the declared turnover of the assessee was increased by the alleged turnover of cash deposit in the bank account. The instant appeal relates to the levy of penalty of Rs.35,830/- levied u/s 271B of the Act for not getting the accounts audited u/s 44AB of the Act.
6. Against this levy of penalty assessee could not succeed in the appeal before the ld. CIT(A) who confirmed the addition observing as follows:
“Ground Nos.1,2,3 & 4:- Through these grounds of appeal the appellant has challenged the imposition of penalty amounting to Rs.35,830/- u/s 271B of the I.T. Act As per the provisions of section 44AB, every person carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds forty lakhs rupees, get his accounts audited by an accountant before the specified date and furnishing by that date the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed. As gross receipts of the assessee exceeds the prescribed limit given in section 44Ab of the Income Tax Act and the assessee failed to comply with the provisions of section 44Ab read with 271B, penalty u/s 271B is leviable in the case.
The contention of the appellant that when the appellant is not maintaining books of account penalty u/s 271B cannot be levied is not acceptable because both the sections i.e. 44Ab and 44AA are together distinct and separate. There is no provisions that the levy of one penalty shall exclude the levy of the other. The pain reading of section 44AB makes it very clear that its provisions are mandatory. The appellant not only to get his accounts audited by an accountant before the specified date but also obtain before that date the report of such audit in the prescribed form duly signed and verified by such accountant. Therefore, the AO is justified in imposing the penalty. Therefore, the penalty imposed by the AO amounting to Rs.35,830/- is