9911796707
TMI Blog1995 (11) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... In the notice issued under section 271B dated 30-3-1988, the AO charged that the assessee " has not filed the Audit Report prescribed under section 44AB read with Rule 6G without reasonable cause explained ". In response to the same, the assessee filed a written reply dated27-3-1989. In the said reply, the assessee stated that a comprehensive reply had already been filed, that the said reply has not been referred to before issuing the notice dated 30-3-1988, that section 271B was attracted only in those cases where the assessee maintained the accounts and failed to get the same audited, that he has not maintained any accounts and filed the return of income by applying a particular net profit rate on the contract receipts, that it was evide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, he held that the provisions of section 271B were clearly attracted in the assessee's case. Accordingly, he imposed a penalty of Rs. 23,918 vide his order dated 30-3-1990 passed under section 271B read with section 274 of the IT Act 1961. While calculating the said penalty, the AO stated that the gross receipts were taken at 50 times of the TDS as the assessee has not shown the gross receipts. Aggrieved by the said levy, the assessee preferred an appeal before the DC (Appeals). 3. In the Memorandum of Appeal (Form No. 35) filed before the DC (Appeals), the following was given under the head " Statement of Facts " :--- " The appellant did not maintain any accounts in respect of the contracts executed by him and the profit as declared w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee's counsel filed a Paper Book of six pages containing copy of the Statement of income filed with the return of income, copy of the deficiency letter dated 11-3-1988 received from the AO, copy of the assessee's reply dated 23-3-1988 in response to the said deficiency letter dated 11-3-1988 and replies dated 2-5-1988 and 27-3-1989 in response to the notice issued under section 271B, notice dated 30-3-1988 issued under section 271B and photostat copy of the Memorandum of Appeal in Form No. 35. The arguments of the assessee's counsel were to the following effect : In the Memorandum explaining the provisions of the Finance Bill, 1984 it was stated in para 16 that a proper audit for tax purposes would ensure that the books of account and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge 4 of the Paper Book. The assessee filed replies dated2-5-1988and27-3-1989in response to the notice under section 271B dated30-3-1988. This can be seen at pages 5 6 of the Paper Book. In the said replies, it was reiterated by the assessee that he did not maintain any accounts in respect of the contracts executed by him from 1-4-1986 to 31-3-1987, that the profit had been declared on estimate basis, that no statutory audit was required to be got done as no accounts were maintained and that the obligation of the assessee in that regard arose only if he had maintained accounts in respect of the business done by him. In the Statement of Facts in Form No. 35, it was clearly mentioned that the only documents available with the assessee were B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 88 plainly stated that no accounts were maintained by him in respect of the contracts executed by him during 1-4-1986 to 31-3-1987, that filing of the trading and profit and loss account and the balance-sheet does not arise and that no statutory audit was required to be done as no accounts were maintained by him. In response to the penalty notice under section 271B the assessee filed replies dated 2-5-1988 and 27-3-1989 reiterating his submissions that no statutory audit was required as the accounts were not maintained by him. But the Assessing Officer observed in his penalty order that it stands to reason that some sort of accounts like purchase account, sales account and vouchers, etc., is a must and that whatever were the accounts with t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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