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2023 (10) TMI 1097 - AT - Income TaxPenalty u/s 271A and u/s 271B - not maintaining books of account and for not getting the booking of account audited as provided u/s 44AB - HELD THAT - The object of requiring the assessee to get his books of accounts audited u/s 44AB is to get a clear picture of the assessee's accounts so as to enable the Income Tax Authorities to assess true and correct income of the assessee. The penalty u/s 271B is attracted for failure of the assessee to get the books of account audited. Since, the case in hand, the assessee did not get his books of account audited, therefore, as per the provisions of section 44AB read with section 271B of the Income Tax Act, the Assessing Officer rightly levied the penalty u/s 271B of the Act. We notice that recently similar issue came for adjudication in the case of Rakesh Kumar Jha vs.- ITO 2023 (5) TMI 704 - ITAT RANCHI and this Tribunal after considering the judicial precedence on this issue has decided it against the assessee holding that in case of not maintaining books of account by a person, whose gross business turnover exceeds the prescribed limit under section 44AB of the Act, then both the penalties i.e. u/s 271A and 271B are leviable After going through the decision of the Coordinate Bench, Ranchi, we are of the view that the same is squarely applicable on the facts of the present case and respectfully following the same, we confirm the finding of the ld. CIT(Appeals) and accordingly penalties for A.Y. 2011-12 and 2012-13 levied under section 271A for not maintaining books of account and penalty under section 271B of the Act for not getting the books of account audited stand confirmed. Decided against assessee.
Issues Involved:
1. Penalty under section 271A of the Income Tax Act for not maintaining books of account. 2. Penalty under section 271B of the Income Tax Act for not getting the books of account audited. Summary: Issue 1: Penalty under Section 271A for Not Maintaining Books of Account The assessee was penalized under section 271A for not maintaining books of account as required under section 44AA of the Income Tax Act. The Assessing Officer (AO) observed significant cash deposits in the assessee's bank account, which were treated as business turnover. Since the turnover exceeded the limits specified under section 44AB, the assessee was required to maintain books of account but failed to do so. Consequently, a penalty of Rs. 25,000/- was imposed for each assessment year (2011-12 and 2012-13). Issue 2: Penalty under Section 271B for Not Getting Books of Account Audited The assessee was also penalized under section 271B for not getting the books of account audited, as the gross turnover exceeded the prescribed limits. The AO initiated penalty proceedings and levied penalties of Rs. 1,36,773/- and Rs. 1,19,650/- for the assessment years 2011-12 and 2012-13, respectively. Tribunal's Findings: 1. Common Issues: The Tribunal noted that the issues raised were common for both assessment years and adjudicated based on the facts for A.Y. 2011-12. 2. Assessee's Admission: The assessee admitted to not maintaining books of account, making them liable for penalty under section 271A. However, the assessee argued that since no books were maintained, the question of getting them audited did not arise, and thus, penalty under section 271B should not be levied. 3. Legal Precedents: The Tribunal referred to the case of Rakesh Kumar Jha vs. ITO, where it was held that both penalties under sections 271A and 271B are leviable if the assessee fails to maintain books of account and also fails to get them audited. 4. Separate Penalties: The Tribunal emphasized that sections 44AA and 44AB are separate provisions with distinct requirements and penalties. The penalties under sections 271A and 271B are not in substitution of each other but are cumulative. 5. Equity and Justice: Allowing the assessee to escape penalty under section 271B for not maintaining books would mean benefiting from their own wrongdoing, which is neither legally justified nor equitable. Conclusion: The Tribunal confirmed the penalties under sections 271A and 271B for both assessment years 2011-12 and 2012-13. The appeals of the assessee were dismissed, and the penalties imposed by the AO were upheld. The judgment was pronounced in the open Court on 4th August 2023.
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