2021 (1) TMI 81 - AT - Income Tax

Penalty levied u/s 271B, 271(1)(b), 272B and 271(1)(b) - HELD THAT - The deposits are made in the joint account and when the PAN of Smt. Chandana Mai is quoted, in our considered opinion, we do not approve the action of this amount being added as turnover of the assessee only. In all such cases peak balances has to be taken. It cannot be said that the deposits in question are the turnover of the assessee. Consequently it is not clear as to whether the assessee was required to maintain books of account under the Act or not. Penalty levied u/s 271B - AO states that the assessee does not maintain books of account. Where the conclusion of the AO is that the assessee does not maintain books of account, no penalty u/s 271B of the Act can be levied for not getting one s books audited u/s 44A of the Act. Hence the same is cancelled. Penalty levied u/s 272B - In the assessment order it is stated that the PAN of Smt. Chandana Mai has been quoted while depositing cash in the bank account. While so to levy penalty for not quoting PAN while making cash deposits is bad in law. Hence we cancel this penalty. Penalty levied u/s 271(1)(b) - assessee has given a certificate from the Medical Officer, Government of West Bengal on his health. We are convinced that the assessee was prevented by sufficient cause from appearing before the AO on a particular date. Otherwise he did appear before the AO on two dates and hence the penalty is cancelled as the assessee was prevented from sufficient cause from appearing before the AO. Penalty levied u/s 271(1)(b) in the case of Smt. Chandana Mai is also cancelled as she was prevented by sufficient cause from appearing before the AO on a particular date. She did appear before the AO on 15.07.2014, as recorded in the assessment order. Hence, we allow this appeal.

Summary

Issues Involved:
Appeal against penalty orders under sections 271B, 271(1)(b), 272B, and 271(1)(b) of the Income Tax Act, 1961 for the Assessment Year 2011-12.

Analysis:
The appeals were filed against penalty orders confirmed by the Commissioner of Income Tax (Appeals) under various sections of the Income Tax Act, 1961. The Appellate Tribunal noted that despite the issuance of notice, the assessee did not appear, leading to the case being disposed of ex-parte after hearing the Departmental Representative. The Tribunal considered the arguments presented by the Departmental Representative, highlighting the non-appearance of the assessee before the Assessing Officer (AO) after initial meetings. The Commissioner of Income Tax (Appeals) passed an ex-parte order due to the non-appearance of the assessee. The Tribunal observed that the CIT(A) did not dispose of the case on merits, leading them to decide the appeal based on the available information.

The Tribunal examined the assessment order passed by the AO and found contradictions regarding the treatment of joint bank accounts and deposits made therein. The Tribunal disagreed with the AO's approach of adding the deposits as turnover of the assessee based on the PAN details provided. It was emphasized that peak balances should be considered in such cases, and it was unclear whether the assessee was required to maintain books of account under the Act. Consequently, the Tribunal concluded that the deposits in question should not be considered as the turnover of the assessee.

Regarding the penalties imposed under different sections of the Act, the Tribunal made specific determinations. For the penalty under section 271B, it was noted that if the AO concludes that the assessee does not maintain books of account, no penalty under this section can be levied. Therefore, the penalty under section 271B was canceled. Similarly, penalties under sections 272B and 271(1)(b) were also canceled based on specific reasons provided by the Tribunal, such as health-related certificate preventing the assessee from appearing before the AO and insufficient cause for not quoting PAN during cash deposits. The Tribunal allowed the appeals filed by the assessees, thereby overturning the penalties imposed.

In conclusion, the Appellate Tribunal allowed the appeals filed by the assessees, canceling the penalties imposed under sections 271B, 272B, and 271(1)(b) of the Income Tax Act, 1961 for the Assessment Year 2011-12. The Tribunal provided detailed reasoning for each penalty cancellation, emphasizing factors such as non-appearance of the assessee, treatment of joint bank accounts, and specific legal provisions under the Act.