2022 (3) TMI 1028 - AT - Income Tax

Penalty u/s 271A - appellant Doctor had failed to maintain books of accounts - HELD THAT - As per Income Tax Rule 6F the appellant i.e. Doctor has to maintain the books of accounts mentioned in the Rule 6F. AR submitted that the appellant is maintaining cash book and petty cash book. Even before the ld.CIT(A) the appellant had submitted that the appellant maintained cash book and petty cash, thus, it is a fact that the appellant had failed to maintain books of accounts mentioned in the Rule 6F. Rule 6F(3) specifically provides for additional books and documents to be maintained by Medical Professionals in addition to their regular books mentioned in Sub-Rule 2 of Rule 6F. Thus, medical professionals has to maintain daily case register and inventory of the medicine stock. On a specific enquiry from the Bench, the ld.AR could not answer the question whether appellant Doctor had maintained the daily case register and medicine stock register. Appellant is liable for penalty under section 271A of the Act for non-maintenance of the books of accounts. No reason has been provided for non-maintenance of the books. Therefore, the penalty order under section 271A is hereby confirmed. - Decided against assessee.

Summary

Issues: Penalty under section 271A for non-maintenance of books of accounts by the Assessee.

Detailed Analysis:

1. Issue of Penalty under section 271A:
The appeal was filed against the penalty imposed by the Assessing Officer (AO) under section 271A of the Income Tax Act for non-maintenance of books of accounts by the Assessee, a Doctor by profession. The AO observed that the Assessee had not maintained the required books of accounts as per section 44AA of the Act. The penalty proceedings were initiated, and despite being given an opportunity, the Assessee failed to file submissions. The penalty of ?25,000 was levied by the AO and upheld by the ld.CIT(A). The Assessee contended that they were maintaining a cash book and petty cash book, but the Tribunal found that these were not sufficient as per the provisions of Rule 6F of the Income Tax Rules. The Rule mandates specific books to be maintained by professionals, including a ledger, stock register, and additional requirements for medical professionals. The Tribunal noted that the Assessee failed to maintain the required books, and no valid reason was provided for non-compliance. Therefore, the penalty under section 271A was confirmed, and the appeal was dismissed.

2. Rule 6F of Income Tax Rules:
The Tribunal referred to Rule 6F, which specifies the books of accounts and documents to be maintained by persons in various professions, including legal, medical, engineering, and others. The Rule outlines the mandatory requirements such as a cash book, ledger, and specific additional documents for medical professionals like a daily case register and inventory of medicine stock. The Assessee's argument that they maintained a cash book and petty cash book was deemed insufficient to meet the statutory requirements outlined in Rule 6F. The Tribunal highlighted that the Assessee failed to provide evidence of maintaining the necessary books and documents as per the Rule, leading to the confirmation of the penalty under section 271A.

In conclusion, the Tribunal upheld the penalty imposed under section 271A on the Assessee for non-compliance with the provisions of Rule 6F regarding the maintenance of books of accounts. The judgment emphasized the importance of adhering to statutory requirements and maintaining proper records as mandated by the Income Tax Rules to avoid penalties and ensure compliance with the law.