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2020 (12) TMI 100 - AT - Income TaxLevy of penalty u/s. 271(1)(b) - failure to comply with the notices issues u/s. 142(1) - whether there was any reasonable cause for the failure to comply to the notices? - HELD THAT - The notices have been duly sent to the address of the assessee mentioned in the Panchanama drawn on the date of search and the ld. AR's contention that notices have not been sent to Panchkula cannot be accepted as the Panchkula address do not pertain to the residential address to the assessee. The notices have been rightly sent to the correct address and the assessee could not establish failure to comply to the notices with any reasonable cause. Hence, we decline to interfere with the order of the ld. CIT (A) and hold that the penalty has been rightly imposed by the Assessing Officer. Levy of penalty u/s. 271A - assessee has not been maintaining books of accounts stipulated u/s. 44AA - HELD THAT - As gone through the provisions of Section 44AA, Section 271A and Section 273B. We have gone through the above provisions, so as to look into whether there was any reasonable cause for the failure to comply to non-maintenance of books of accounts. The notices have been rightly sent to the correct address and the assessee could not establish failure to comply to the provisions of the Act with any reasonable cause. Hence, we decline to interfere with the order of the ld. CIT (A) and hold that the penalty has been rightly imposed by the Assessing Officer for non-maintenance of books of accounts. Levy of penalty u/s. 271B - AO has already imposed penalty u/s 271A on the appellant for non maintenance of books of accounts - HELD THAT - We find that the Assessing Officer has levied penalty u/s. 271A as well as Section 271B for the same years. The issue of levy of penalty u/s. 271A as well as 271B has been adjudicated in the case of SH. MOHIT GARG, DELHI 2020 (6) TMI 719 - ITAT DELHI audit could not have been conducted in the absence of books of accounts. If a person has not maintained the books of accounts, the question of audit does not arise. The infraction of Section 44AB gets attracted only when the assessee maintains the books of accounts but fail to get them audited - no reason to initiate penalty u/s 271B. The penalty for non-maintenance of books of accounts has already been rightly levied, hence the offence has already been taken note of and the only recourse is to levy penalty u/s 271A for non-compliance of Section 44AA. These two provisions operate under two different realms. Thus the penalty levied by the AO as confirmed by the ld. CIT (A) be obliterated. With regard to the arguments of the ld. DR that owing to the difference in the penalties, it prima facie encourages non- maintenance of books of accounts, at this juncture, we refrain ourselves from trespassing the domain of legislature as to the difference of the quantum of penalty leviable u/s 271A and 271B. - Decided in favour of assessee. Levy of penalty u/s. 271F - search u/s. 132 - failure to furnish return of income which has been confirmed by the ld. CIT (A) - HELD THAT - We find that the notices have been duly sent to the address of the assessee mentioned in the Panchanama drawn on the date of search and the ld. AR's contention that notices have not been sent to Panchkula cannot be accepted as the Panchkula address do not pertain to the residential address to the assessee. The notices have been rightly sent to the correct address and the assessee could not establish failure to comply to the notices with any reasonable cause. Hence, we decline to interfere with the order of the ld. CIT (A) and hold that the penalty has been rightly imposed by the Assessing Officer. Admission of additional evidences - DR argued that the Panchanama, the bank statement and the proceedings PMLA Court/ACCM Special Act are not any additional evidences which has any material impact on the adjudication of the issue before the Tribunal - addition @10% of the gross receipts - HELD THAT - The instant case doesn't meet the basic requirement of admitting of additional evidences. The assessee has been accorded sufficient opportunities which he fail to make use of. The additional evidences in the form of any document are examination can be allowed to be produced under the following circumstances -When the Tribunal feels that it is necessary to enable it to pass orders or For any substantial cause or Where the Income Tax authority did not provide sufficient opportunity to the assessee In the present case, none of the three conditions are fulfilled - we find that the proceedings add processes, before the ACCM, Panchanama and the bank statement cannot be treated as additional evidences under Rule 29 which are required for adjudication of the matter. Hence, the application of the assessee under Rule 29 is hereby rejected. AO determined 10% of the gross receipts as income of the assessee for the year in question - The assessee is in the business of manufacturing and trading of perfumery products. The assessee has not furnished any details before the AO or before the ld. CIT(A). The purported additional evidences proposed to be filed by the assessee before the Tribunal do not materially change the profit computed by the AO The gross receipts has reflected in the bank statements have been duly considered by the Assessing Officer while determining the profit @10%. Hence, we hereby uphold the profit determined by the authorities below. No useful purpose would be served by accepting the request of the ld. AR to set aside the case to the Assessing Officer for allowing another opportunity for making further inquiries. Appeals of the assessee are dismissed.
Issues Involved:
1. Levy of penalty under Section 271(1)(b) 2. Levy of penalty under Section 271A 3. Levy of penalty under Section 271B 4. Levy of penalty under Section 271F 5. Condonation of delay and admission of additional evidence Detailed Analysis: 1. Levy of Penalty under Section 271(1)(b): The assessee was penalized under Section 271(1)(b) for failing to comply with notices issued under Section 142(1). Despite multiple notices and summons, the assessee did not respond. The assessee argued that the notices were not received and sought a stay on penalty proceedings. However, the tribunal found that the notices were duly sent to the correct address and the assessee's non-compliance was habitual. The tribunal upheld the penalty, stating that the assessee did not establish any reasonable cause for non-compliance as required under Section 273B. 2. Levy of Penalty under Section 271A: The assessee was penalized under Section 271A for not maintaining books of accounts as required under Section 44AA. The assessee claimed that books were maintained in Tally Software but could not be reconciled due to a crashed hard disk. The tribunal found that the assessee failed to provide reasonable cause for non-compliance and upheld the penalty. 3. Levy of Penalty under Section 271B: The tribunal noted that the Assessing Officer had levied penalties under both Section 271A and Section 271B for the same years. Citing judicial precedents, the tribunal held that if books of accounts are not maintained, the question of audit does not arise, and thus, penalty under Section 271B should not be imposed. The tribunal deleted the penalty under Section 271B, stating that the penalty for non-maintenance of books under Section 271A was sufficient. 4. Levy of Penalty under Section 271F: The assessee was penalized under Section 271F for failing to furnish the return of income. The tribunal found that the notices were correctly sent to the assessee's address and that the assessee did not establish any reasonable cause for non-compliance. Therefore, the tribunal upheld the penalty. 5. Condonation of Delay and Admission of Additional Evidence: The appeals for the assessment years 2010-11, 2011-12, and 2012-13 were delayed by 70, 70, and 139 days, respectively. The tribunal condoned the delay, considering the assessee's financial difficulties and lack of legal assistance. However, the tribunal rejected the additional evidence submitted by the assessee, stating that the conditions under Rule 29 of the ITAT Rules were not met. The tribunal found that the additional evidence did not materially impact the profit computation by the Assessing Officer and upheld the profit determination at 10% of gross receipts. Conclusion: The tribunal dismissed all the appeals, upholding the penalties under Sections 271(1)(b), 271A, and 271F, while deleting the penalty under Section 271B. The tribunal also rejected the additional evidence and upheld the profit determination by the Assessing Officer. The order was pronounced in the open court on 30/09/2020.
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