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Issues Involved: Penalty u/s 271B for non-compliance with section 44AB of the Income-tax Act, 1961.
Summary: Issue 1: Penalty u/s 271B for non-compliance with section 44AB The appellant, engaged in civil contracting, filed income tax return without Tax Audit Report as per section 44AB. The Assessing Officer imposed a penalty u/s 271B for not getting the books audited. The appellant argued non-maintenance of account books and declared income on estimate basis. The Commissioner of Income-tax (Appeals) upheld the penalty citing turnover exceeding the limit. The appellant cited judgments to support that penalty u/s 271B applies only for failure to audit books, not for non-maintenance. The appellant explained reasons for non-maintenance and subsequent compliance. The Departmental representative argued that non-maintenance under section 44AA does not excuse non-compliance with section 44AB. Issue 2: Interpretation of section 44AB in absence of maintained account books The Tribunal noted the appellant did not maintain account books, thus audit requirement u/s 44AB did not apply. Citing judgments, the Tribunal held that penalty u/s 271B does not apply if no accounts are maintained, as in this case. The Tribunal set aside the penalty imposed by the Commissioner of Income-tax (Appeals) and directed deletion of the penalty amount. In conclusion, the Tribunal allowed the appeal of the assessee, emphasizing that penalty u/s 271B does not apply when account books are not maintained, as per the provisions of the Income-tax Act, 1961.
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