2023 (3) TMI 1036 - AT - Income Tax

Penalty imposed u/s 271A - assessee has not maintained books of account as mandated u/s 44AA - HELD THAT - In the instant case there is no income from business or profession received by the assessee which exceeds Rs.1,20,000/-. Therefore, maintenance of books of account u/s 44AA of the Act is not mandated for the assessee. Hence, the imposition of penalty u/s 271A of the Act for non-maintenance of books of account is not warranted and we delete the same - Appeal filed by the assessee is allowed.

Summary

Issues:
The appeal is against the order of the CIT(A) confirming a penalty u/s 271A of the Income Tax Act, 1961.

Issue 1: Penalty under Section 271A
- The AO imposed a penalty of Rs.25,000 u/s 271A as the assessee did not maintain books of account as required under Section 44AA of the Act.
- The CIT(A) upheld the penalty, stating that the assessee failed to explain the source of income and did not file a return of income in response to notice served u/s 148.
- The Tribunal found that the assessee's income from capital gains and other sources did not exceed the threshold requiring maintenance of books of account u/s 44AA.
- Consequently, the Tribunal deleted the penalty imposed u/s 271A, as it was not warranted in this case.

Final Decision:
The Tribunal allowed the appeal, setting aside the penalty imposed under Section 271A of the Income Tax Act, 1961.