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2023 (12) TMI 23 - AT - Income TaxPenalty u/s. 271A and 271B - non-maintenance of books of account and not getting the books of accounts audited u/s. 44AB recpectivily - HELD THAT - The bench noted that in the case of the assessee there has been a levy of penalty for non-maintenance of books of accounts u/s. 271A of the Act and the ld. DR did not controvert the fact and finding of the lower authorities. So, once it has been categorically held that the assessee failed to maintained the books of account and consequent there upon the penalty has also been levied the separate penalty for not getting the books of account audited cannot be fastened. The penalty u/s. 271B can be levied when the assessee maintains the books and does not get them audited but once it is been held and not disputed that the assessee has not maintained the books of accounts how the penalty for not getting the books audited be levied. Thus once the penalty is levied for non-maintenance of book of accounts, there cannot be further default for not getting the same audited as required u/s 44AB of the Act and therefore, the penalty levied u/s 271B is not justified and thus vacated. Penalty u/s 271A - Inspite of seven opportunities were given the assessee neither appeared nor filed any written submission so as to controvert the finding of the lower authorities. Therefore, in view of the matter we not find any infirmity in the order of the ld. CIT(A) and the thus, the levy of penalty u/s 271A stands confirmed.
Issues Involved:
1. Imposition of penalty for not getting the books of accounts audited. 2. Validity of notice assuming jurisdiction by the Assessing Officer. 3. Calculation of turnover and applicability of Section 271A. 4. Principles of natural justice and opportunity of being heard. 5. Penalty on estimation basis and immunity under Section 273B. 6. Reliance on incorrect facts in the order. Summary: 1. Imposition of Penalty for Not Getting the Books of Accounts Audited: The assessee argued that no books of accounts were maintained, so the question of audit does not arise. The Tribunal noted that the assessee was penalized under Section 271A for non-maintenance of books, and therefore, a separate penalty under Section 271B for not getting the books audited was not justified. The Tribunal referenced the case of Shahnaz Khanan, Jhalawar Vs. ITO, stating, "The provisions of Section 44AB of the Act can be invoked only when the assessee has complied with the provisions of Section 44AA of the Act." Consequently, the penalty under Section 271B was vacated, and the appeal in ITA No. 280/JPR/2023 was allowed. 2. Validity of Notice Assuming Jurisdiction by the Assessing Officer: The assessee contended that the notice by which jurisdiction was assumed was vague and invalid. However, this issue was not elaborated upon in the judgment. 3. Calculation of Turnover and Applicability of Section 271A: The assessee disputed the calculation of turnover, arguing that total deposits were wrongly reckoned as turnover instead of commission receipts. The Tribunal upheld the penalty under Section 271A, stating, "The appellant failed to maintain books of accounts as required u/s 44AA of the Act." The appeal in ITA No. 281/JPR/2023 was dismissed. 4. Principles of Natural Justice and Opportunity of Being Heard: The assessee claimed that the penalty order was passed without a reasonable opportunity of being heard. The Tribunal noted that the assessee was given seven opportunities but did not appear or file any adjournment application, indicating a lack of seriousness in pursuing the appeal. 5. Penalty on Estimation Basis and Immunity Under Section 273B: The assessee argued that no penalty can be levied where the assessment is made on an estimation basis and claimed immunity under Section 273B. The Tribunal dismissed this contention, noting that the penalty under consideration was not directly linked to the quantum of addition but to the failure to maintain books of accounts. 6. Reliance on Incorrect Facts in the Order: The assessee contended that the penalty was based on incorrect facts. However, the Tribunal found no merit in this claim and upheld the penalties imposed by the lower authorities. Conclusion: The appeal in ITA No. 280/JPR/2023 was allowed, vacating the penalty under Section 271B, while the appeal in ITA No. 281/JPR/2023 was dismissed, confirming the penalty under Section 271A. The order was pronounced in the open Court on 21/09/2023.
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