1993 (7) TMI 154 - AT - Income Tax

Summary

Issues: Appeal against penalties imposed u/s 271A for non-maintenance of bank account.

Summary:
The two assessees filed returns of income from truck plying, which were accepted under section 143(1)(a) of the Income-tax Act, 1961. However, penalties of Rs. 2,000 each were imposed by the Assessing Officer u/s 271A for non-maintenance of bank account. The D.C.I.T.(A) cancelled the penalties, stating that the assessees had maintained records enabling income computation. The department appealed.

At the appellate level, the Departmental Representative highlighted section 44AA(2) requirements for maintaining books of account. The assessees were not represented, but assistance was provided by an Advocate and a Chartered Accountant. The Department argued that the penalties should not have been cancelled.

The Tribunal observed that section 44AA(2) mandates maintaining books of account enabling income computation. It was emphasized that any document facilitating the preparation of profit and loss account suffices as books of account. The Tribunal disagreed with the Department's contention that penalties should apply in cases using section 145(1) or 145(2) for income computation.

Notably, the Assessing Officer did not issue a notice u/s 139(9) for any defects in the assessees' documents. This indicated that the documents provided were deemed sufficient for income computation. Consequently, the Tribunal upheld the D.C.I.T.(A)'s decision to cancel the penalties imposed by the Assessing Officer.

In conclusion, the departmental appeals were dismissed, affirming the cancellation of penalties by the D.C.I.T.(A) for both assessees.