2022 (4) TMI 722 - AT - Income Tax

Penalty u/s 271B - not getting the books of accounts audited as required u/s 44AB - HELD THAT - We find that the assessee has not disputed the fact of the turnover of the assessee of ₹ 27,69,32,010/-. The assessee has also not disputed the requirement of books of account be audited as per the provisions of section 44AB of the Act. Despite the fact that the books of account of the assessee were required to be added under section 44AB of the Act, the assessee has not explained the reasons for not getting the books of account audited. Thus when the assessee has not explained the reasons for not getting his books of account audited, we do not find any reason to interfere with the orders of the authorities below levying the penalty under section 271B - Decided against assessee.

Summary

Issues:
Levy of penalty under section 271B of the Income Tax Act for assessment year 2012-13 due to non-compliance with audit requirements under section 44AB.

Analysis:
The case involved an appeal against the penalty order passed under section 271B of the Income Tax Act for the assessment year 2012-13. The assessee, an individual, failed to comply with audit requirements under section 44AB despite repeated notices issued by the Assessing Officer. The Assessing Officer proceeded with the best judgment assessment due to non-compliance. The turnover of the assessee exceeded the threshold limit necessitating the audit of books of accounts. The Assessing Officer initiated penalty proceedings under section 271B after the assessee failed to respond to notices and show cause notices. The penalty of ?1,50,000 was levied, which the assessee challenged before the CIT(A) unsuccessfully.

The Tribunal noted that the assessee did not dispute the turnover or the requirement for auditing the books of accounts under section 44AB. The assessee failed to provide any explanation for not complying with the audit requirements. The Assessing Officer found the assessee non-cooperative and non-compliant during the assessment proceedings, leading to the best judgment assessment. Despite multiple opportunities given to the assessee to explain the non-compliance, no response was received. The penalty was imposed as the minimum under section 271B, amounting to ?1,50,000.

The Tribunal upheld the penalty imposed by the authorities below, as the assessee failed to provide any valid reasons for not getting the books of accounts audited. The Tribunal found no grounds to interfere with the penalty levied under section 271B of the Income Tax Act. Consequently, the appeal of the assessee was dismissed, and the penalty of ?1,50,000 was upheld.

In conclusion, the Tribunal affirmed the penalty under section 271B due to the assessee's non-compliance with audit requirements under section 44AB, as the assessee failed to provide any justifiable reasons for the lapse. The decision was based on the non-cooperation and non-compliance of the assessee during the assessment proceedings, leading to the imposition of the minimum penalty permissible under the law.