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TMI Blog2008 (9) TMI 585X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment years 1990-91, 1991-92 to 2001-02. It was found during survey that in the returns filed by the assessee for the financial years 1990-91 to 2000-01 the sales declared to the Sales Tax Department exceeded to rupees forty lakhs. How-ever, the accounts have not been audited as required under section 44AB of the Act and audit report has not filed in Form No. 3CB along with the return filed by the assessee and since there was failure with the require-ment of section 44AB of the Act, show-cause notice was issued to the assessee on March 13, 2002, as to why for the said failure on the part of the assessee, penalty of half per cent. of the gross receipts of one year, pro-posed penalty of rupees one lakh should not be levied for each year. The said show-cause notice was served upon the assessee. The assessee filed reply stating that selling price of petroleum products is administered by the Government and it is applicable to all petroleum dealers inIndia. The petroleum company authorises the assessee to deduct a fixed percentage as commission from the amounts payable for its purchase consideration and relation between the petroleum company and the assessee is of principal-agent. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als), the assessee preferred appeal before the Income-tax Appellate Tribunal, Bangalore Bench "B" in Appeal No. I. T. A. No. 441/Bang/2003, which was clubbed with other appeals arising out of the common order passed by the Commissioner of Income-tax (Appeals), Hubli under the same impugned order and the Appellate Tribunal by order dated January 23, 2004 held that the proceedings initiated for imposition of penalty and the order imposing penalty was barred by time and since the assessee has not maintained any account, no penalty could be imposed under section 271B of the Act and proceedings could be initiated for imposing penalty under section 271A of the Act. The Tribunal further held that the assessee has reasonable cause for not getting the accounts audited as he was only collecting commission and the commission received by him did not exceed rupees forty lakhs and the return filed by the assessee has been accepted for ten years and accordingly, allowed the appeal and set aside the order passed by the Commissioner of Income-tax (Appeals), Hubli. Being aggrieved by the said order passed by the Income-tax Appellate Tribunal datedJanuary 23, 2004, the Revenue has preferred this appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reference shall be deemed to have been issued under sub-section (1) and the provisions of sub-sections (2), (3) and (4) of the section shall apply accordingly and under sub-sections (2), (3) and (4) where the substantial question, of law is involved, the mere fact that monetary limit has been prescribed for filing the appeal would not be a bar for deciding the appeal. Even otherwise, we are satisfied that it is an excep-tional case wherein the Revenue was justified in filing the appeal and wherefore, there is no merit in the contention of the learned counsel for the respondent that the appeal itself is not maintainable. 9. We have heard the learned counsel for the appellant-Revenue and the learned counsel for the respondent-assessee on the abovesaid substantial questions of law and we answer the abovesaid substantial questions of law as follows : (1) in the negative (2) in the negative (3) in the negative (4) does not survive for consideration (5) in the negative for the following reasons. Substantial questions of law 1, 2 and 5. 10. These substantial questions of law relate to the finding given by the Income-tax Appellate Tribunal holding that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act as it cannot be disputed that pucca book and purchase register are the accounts maintained by the assessee. 15. It is clear from the definition that "books or books of account" includes ledgers, day books, cash books, account books and other books, whether, kept in the written form or as print-outs of data stored in a floppy, disc, tape or any other form of electro magentic data storage device and where-fore, it cannot be denied that the assessee has maintained account books as defined, under section 2(12A) of the Act though not all the books prescribed under the Act as it cannot be disputed that the pacca book of cash sales and purchase register are the account books as defined under section 2(12A) of the Act. The Assessing Officer and the Commissioner of Income-tax (Appeals) had confirmed the order of the Assessing Officer to the effect that the notice initiating proceedings for imposing of penalty under section 271B of the Act was justified as the assessee has maintained account books. The finding of the Tribunal that the assessee has not maintained any books of account is perverse and arbitrary as it is clear from the reply given by the assessee as also the ans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was initiated on March 13, 2002 and wherefore, the commencement period for the period limitation would not be one year after the filing of the return and the period of limitation would be six months from the date of commencement of the proceedings for initiation of penalty and in view of the wording of section 271(1) of the Act the limitation would be end of the month in which action for imposition of penalty is initiated and wherefore, it would be September 31, 2002 for imposing penalty has been passed by the assess-ing authority on September 23, 2002 and wherefore, the order imposing penalty is not barred by limitation and the finding of the Tribunal is clearly erroneous and contrary to the provisions of section 275(1) of the Act and hence, unsustainable and hence we answer substantial questions of law 1, 2 and 5 in the negative in favour of the Revenue and against the assessee. Substantial question of law No. 3. 19. This substantial question relates to the question as to whether the find-ing of the Appellate Tribunal that the assessee had reasonable cause for not getting the accounts audited under section 273B of the Act is justified. The Tribunal has proceeded on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... easonable cause for not getting the accounts audited under section 44AB of the Act. 21. We hold that there is no merit in the contention as we have held that the assessee cannot plead ignorance of contents of section 44AB of the Act which requires that if the turnover exceeds rupees forty lakhs, the accounts are required to be audited and not where commission received by him exceeds forty lakhs and in view of our finding that the order passed by the Tribunal holding that the assessee has reasonable cause in not getting his accounts audited is contrary to section 44AB of the Act and hence, we hold that the discretion exercised by the Appellate Tribunal is not judicious and the same is liable to'be set aside. 22. The only other substantial question of law which is required to be considered is, i.e., framed at the time of admission, whether the Tribunal was in holding that the receipt of money by the assessee from BPCL was commission and not profit ? (substantial question of law No. 4). 23. This substantial question of law does not arise for consideration in this appeal as it is clear from the provisions of section 44AB of the Act that whenever the turnover exceeds r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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