TMI Blog2018 (5) TMI 1985X X X X Extracts X X X X X X X X Extracts X X X X ..... deration, the provisions of Section 44AA of the Act are clearly applicable and the assessee was liable to maintain her books of account. Nothing has been brought on record which demonstrates any reasonable cause on part of the assessee in non- maintenance of her books of accounts. Therefore, we confirm the action of the AO in levying penalty under section 271A and the ground of appeal is hereby dismissed. Penalty U/s 271B - not getting the books of account audited - HELD THAT:- Once the penalty has been levied for non-maintenance of books of accounts, there cannot be penalty again for non-audit of books of accounts which were not kept at first place. It is clearly a case of impossibility of performance where it is expected that the assessee should get her books of accounts audited when it is a known and admitted fact that there are no regular books of accounts which have been maintained at first place. Our view is fortified by the decision of SURAJMAL PARSURAM TODI [ 1996 (8) TMI 102 - GAUHATI HIGH COURT] wherein it was held that when a person commits an offence by not maintaining the books of accounts as contemplated under section 44AA, the offence is complete and after that, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer worked out the turnover of ₹ 96,10,000/- and estimated the NP rate at 5% against 4.11% declared by the assessee and made addition of ₹ 4,80,500/- in the hands of the assessee. Separately, the penalty proceeding was initiated for concealing the particulars of income vide issuance of notice dated 28/11/2013 U/s 271(1)(c) of the Act. 4. The assessee has not preferred any appeal against the said additions made by the Assessing Officer hence the quantum proceedings have since attained finality. During the course of penalty proceedings, the Assessing Officer observed that the submission of the assessee towards 3 ITA 951 to 953/JP/2017_ Roshni Devi Vs ITO non levy of penalty is general in nature and not convincing for the reason that the assessee has not shown actual NP rate as well as actual turnover of her business in the return of income filed for the year under consideration. Accordingly, penalty @ 100% of tax sought to be evaded amounting to ₹ 73,022/- was levied on the assessee. 5. Being aggrieved, the assessee carried the matter in appeal before the ld. CIT(A), who has confirmed the said levy of penalty U/s 271(1)(c) of the Act. 6. Now the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the IT Act, 1961 is not automatic and is a matter of discretion and the AO has to be fair and objective. It has been held in a recent judgement by the Honorable Supreme Court in the matter of CIT Vs Reliance Petroproducts Pvt. Ltd. (2010) 210 CTR (SC) 228 that where there is no finding that any details supplied by the assessee in its return of income are found to be incorrect or erroneous or false, there is no question of inviting the penalty u/s 271(1)(c). A mere making of false claim, which is not sustainable in law, by itself will not amount to furnishing inaccurate 5 ITA 951 to 953/JP/2017_ Roshni Devi Vs ITO particulars regarding the income of the assessee. Such claim made in the return of income cannot amount to furnishing inaccurate particulars. It has also been held by the Honorable ITAT Delhi Bench in the matter of Nikunj Jain Vs CIT that penalty u/s 271(1)(c) cannot be imposed because the assessee paid the due tax to buy peace and to avoid litigation. It has been held by the Hon'ble Supreme Court in the matter of M/s Price Waterhouse Coopers (P) Ltd. Vs Commissioner of Income Tax reported in (2012) 25 taxmann.com 400 (SC) that penalty should not be imposed where the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... source of cash deposit of ₹ 1.13 crores in the bank account maintained by the assessee. During the course of assessment proceedings, the assessee submitted that the cash deposits represents the business receipts arising out of business transactions pertaining to M/s Jharkhand Electric Electronics and due to some inadvertent mistake, the same was not reported in the return of income originally filed. Thereafter, the assessee filed trading and profit and loss account of M/s Jharkhand Electric Electronics showing net profit of ₹ 3,75,344/- on the total sales of ₹ 91,36,106/- showing the NP rate @ 4.11%. The AO however estimated the sale amounting to ₹ 96,10,000/- and estimated the net profit @ 5% and made an addition of ₹ 4,80,500. It is therefore a clear case where the assessee has failed to report the business receipts in respect of her regular business activities while filing her return of income and subsequently, when the matter was selected for scrutiny, she has come forward and submitted the details of its trading and profit/loss account. The explanation of the assessee in not reporting the said business receipts in her original return of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exceeds ₹ 60 lacs, the provisions of Section 44AB of the Act are clearly applicable and the assessee has failed to get her books of account audited. Accordingly, penalty @ 0.5% of total turnover amounting to ₹ 51,341/- was levied on the assessee. 13. Being aggrieved, the assessee carried the matter in appeal before the ld. CIT(A), who has since confirmed the said levy of penalty by following the decision of Coordinate Bench in the case of S.J. Agarwal Co. Vs ITO (2008) 114 ITD 27 (Pune (SMC). 14. Now the assessee is in appeal before us. During the course of hearing, the ld AR of the assessee has submitted that the assessee was under the bonafide belief that he is not required to obtain audit report only in respect of that business, the turnover of which crosses the limit of 9 ITA 951 to 953/JP/2017_ Roshni Devi Vs ITO the assessment year It was clarified by ICAI that tax audit as such is conducted in respect of an assessee and not in respect of particular business. The assessee having acted in bonafide belief and had no dishonest intention in not obtaining audit report for all the two businesses carried on by her, no penalty under section 271B to be imposed. Rel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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