2000 (2) TMI 43 - HC - Income Tax

Summary

Issues involved: Whether penalty u/s 271B of the Income-tax Act, 1961 was rightly levied on the assessee for failure to get accounts audited u/r 44AB.

Judgment details:

Issue 1: Penalty u/s 271B
The Tribunal deleted the penalty imposed by the Commissioner of Income-tax on the assessee for not getting its accounts audited u/r 44AB. The Tribunal found that the entire amount of the total transaction cannot be considered as the receipt accruing to the assessee, as the assessee was acting as an agent in the advertising business. The Tribunal concluded that only the commission earned by the assessee, amounting to Rs. 14.55 lakhs, should be taken into account for audit purposes. Therefore, section 44AB was not attracted, and the penalty u/s 271B was deleted by the Tribunal.

Key points:
- The assessee, a partnership firm, acted as an agent in advertising business.
- The Tribunal determined that only the commission earned by the assessee should be considered for audit purposes.
- Section 44AB was found not to be attracted in this case.
- Penalty u/s 271B was deleted by the Tribunal.

Final Decision:
Based on the findings of fact recorded by the Tribunal, the High Court upheld the decision to delete the penalty imposed on the assessee. The Court noted that the assessee acted as an agent for commission and did not interfere with the Tribunal's order. Therefore, the appeal was dismissed.