2011 (4) TMI 84 - HC - Income Tax

Penalty u/s 271-A - Requirement to Keep and maintain any such books of account and other documents as required by Section 44AA - The Assessing Officer as well as the Tribunal have not relied solely on the recorded statement of the assessee but have also taken into consideration the circumstantial evidence - Tribunal in its order dated 25th April,2000 observed that in course of penalty proceedings or the appellate proceedings relating thereto , the cash books and ledger books were not produced for verification as well as no steps were taken by the assessee to get the alleged wrong statement of the author of the statement explained by filing any affidavit or by producing the books of account and audit reports, soon after the survey - Question of law is not involved but it is a case where the appellant challenged the sufficiency of evidence only and once there is some material, justifying the order passed by the Tribunal, do not find that in the appellate jurisdiction, this Court should interfere in such matter where penalty has been imposed legally on the basis of cogent reasons - Do not find any merit in these appeals - Hence, these appeals are dismissed. Statement u/s 133A - the evidentiary value of the statement recorded under Section 133A (3)(iii) may be different than the statement recorded during the course of search and seizure under Section 132(4) because of the reason that under sub-section(4) of Section 132 the authorised officer is empowered to examine the person on oath where under sub-clause (iii) of sub-section(3) of Section 133A only statement can be recorded but not on oath.

Summary

Issues:
Penalty under Section 271-A of the Income Tax Act, 1961 for failure to maintain books of account as required by law.

Analysis:
The judgment dealt with the imposition of a penalty under Section 271-A of the Income Tax Act, 1961 on an assessee for failing to maintain the necessary books of account as required by law. The appellant's premises were surveyed under Section 133A of the Act, and the assessee's statement was recorded during the survey. The Assessing Officer imposed the penalty based on the statement admitting the non-maintenance of books of account and the failure to file audited accounts. The Commissioner of Income Tax (Appeals) held that the penalty could not be sustained, citing the lack of clarity in the requirement for maintaining books of account under Section 44AA(2)(i). The appellant argued that the statement recorded should not have been relied upon, referencing judgments from other High Courts and the Supreme Court.

The Court noted that during the survey, the authorized person admitted to not maintaining books of account, and this admission was not retracted. The appellant failed to produce the books of account to substantiate their claim of compliance with Section 133A. The Assessing Officer and the Tribunal considered circumstantial evidence in addition to the recorded statement. The Tribunal observed that no cash books or ledger books were produced for verification, and no steps were taken to explain the alleged wrong statement. The Court emphasized that the sufficiency of evidence was challenged, not a question of law, and interference was not warranted if the penalty was imposed based on cogent reasons.

In conclusion, the Court dismissed the appeals, finding no merit in challenging the imposition of the penalty. The decision was based on the failure of the appellant to produce necessary evidence and the reliance on the recorded statement during the survey, coupled with circumstantial evidence considered by the authorities.