2024 (3) TMI 940 - AT - Income Tax

Penalty u/s. 271B - penalty u/s. 271A has been levied as assessee has not audited his book of accounts as per the provisions of section 44AB - HELD THAT - It is a settled proposition of law that once the penalty has been levied u/s. 271A of the Act for non maintenance of books of accounts, then penalty u/s. 271B of the Act cannot be levied. See Varadagovind Parthasarthy Iyer 2023 (8) TMI 1444 - ITAT MUMBAI . Once the penalty u/s. 271A has been levied for non maintenance of books of accounts, no penalty u/s. 271B of the Act can be levied. This view has been supported by the decisions of various high courts. It is observed that in the present case in hand the ld. A.O. had levied a penalty u/s. 271A of the Act which according to the ld. AR has been accepted and paid by the assessee. As per the decisions cited herein above, we deem it fit to hold that penalty u/s. 271B of the Act cannot be levied in the present facts of the case for non auditing of the books of accounts where the assessee has failed to maintain the same. We hereby direct the ld. A.O. to delete the impugned penalty. Ground no. 1 raised by the assessee is hereby allowed. Penalty u/s. 271(1)(c) - Assessee has concealed the particulars of income during the year under consideration - CIT(A) upheld the penalty vide an ex parte order holding that the assessee has failed to substantiate his claim neither by documentary evidence nor by the submission of the assessee - assessee contended that there has been no variation in the returned and assessed income - HELD THAT - It is observed that the assessee had filed his return of income in response to notice u/s. 148 of the Act, declaring total income which amounts to business income on the total turnover and commission income which aggregates to Rs. 6,57,615/- out of which the assessee had claimed deduction of Rs. 15,970/- under Chapter VIA of the Act. A.O. in the assessment proceeding had accepted the return of income filed by the assessee and determined the total income without any variation between the returned and the assessed income From the above observation, we deem it fit to hold that as there has been no variation in returned and the assessed income, there could not be any possibilities of the assessee concealing the particulars of income which could attract the provision of section 271(1)(c) of the Act. We hereby deem it fit to direct the ld. A.O. to delete the impugned penalty levied u/s. 271(1)(c) of the Act. Hence, the grounds raised by the assessee are hereby allowed.

Summary

Issues Involved:
The appeal challenges the ex parte order of the Commissioner of Income Tax (Appeals) regarding penalty levied under sections 271B and 271(1)(c) of the Income Tax Act, 1961 for the Assessment Year 2016-17.

Issue 1: Penalty under Section 271B
- The assessee challenged the penalty levied under section 271B for failure to maintain books of accounts and get them audited.
- The Assessing Officer (A.O.) initiated penalty proceedings under sections 271A and 271B.
- The assessee contended that penalty under section 271B cannot be levied when books of accounts are not maintained, citing relevant case law.
- The Tribunal held that once penalty under section 271A is levied for non-maintenance of books of accounts, penalty under section 271B cannot be imposed.
- The Tribunal relied on various High Court decisions supporting this view and directed the A.O. to delete the penalty.

Issue 2: Penalty under Section 271(1)(c)
- The appeal challenged the penalty imposed under section 271(1)(c) for alleged concealment of income particulars.
- The A.O. levied the penalty based on alleged concealment of income by the assessee.
- The assessee argued that there was no variation between the returned and assessed income, thus no concealment existed.
- The Tribunal held that if the returned and assessed income are the same, penalty under section 271(1)(c) cannot be imposed.
- The Tribunal referred to a precedent and directed the A.O. to delete the penalty under section 271(1)(c).

Separate Judgement by the Judges:
- The Tribunal passed a consolidated order for both appeals, with detailed reasoning and citations of relevant case law.
- The Tribunal provided a comprehensive analysis of each issue, considering the arguments of the assessee and the Departmental Representative.
- The Tribunal emphasized the legal principles governing the imposition of penalties under the Income Tax Act and provided clear directives to the Assessing Officer regarding the deletion of the penalties in question.