9911796707
TMI Blog1998 (9) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... er, during the course of assessment proceedings the assessee did not produce the books of account despite several opportunities. Therefore, the Assessing Officer came to the conclusion that the assessee has not retained the books of account. He levied the penalty of Rs. 15,000 for the assessee's failure to retain the books of account. On appeal, the Commissioner of Income-tax (Appeals) cancelled the penalty levied by the Assessing Officer. Hence this appeal by the Revenue. 3. At the time of hearing before us, the learned Departmental Representative submitted that as per section 44AA(2) the assessee carrying on business or profession is required to maintain the books of account which enables the Assessing Officer to compute his total incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee is required to keep and maintain the books of account as per section 44AA(2). It is undisputed that the assessee has kept and maintained such books of account. Section 44AA(4) empowers the Central Board of Direct Taxes to prescribe by Rules the period for which the books of account are to be retained. As per rule 6F the C.B.D.T. prescribes the books of account to be maintained by the person carrying on legal, medical, engineering or other profession. Sub-rule (5) of Rule 6F provides the period for which such books of account are to be retained. This rule is applicable only in respect of the person carrying on the profession specified in section 44AA(1). Section 271 A provides penalty for assessee's failure to keep and maintain the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s required by section 44AA or rules made thereunder, (ii) if the assessee fails to retain such books of account and other documents for the period specified in the said rules. In this case the Assessing Officer had levied the penalty for assessee's failure to retain the books of account. To appreciate the arguments of both the sides it is essential to have a look at section 44AA and rules made thereunder. Section 44AA(1) provides that every person carrying on legal, medical, engineering or architectural profession or profession of accountancy etc. (hereinafter shall be referred to as "specified professions") shall keep and maintain such books of account and other documents as may enable the Assessing Officer to compute his total income. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompute the income. Such books of account should be retained also till the completion of assessment otherwise it cannot be said that the assessee has made compliance of section 44AA(2). As we have already discussed that section 271 A provides for penalty in respect of two defaults, one is for failure to keep and maintain the books as provided by the Act, second is for failure to retain such books of account as prescribed by Rules. In this case the penalty has been levied for the second default i.e. failure to retain the books of account. As the Rules provides only for maintenance and retention of the books of account by the person carrying on a specified profession, if the person other than the person carrying on the specified profession has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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