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TMI Blog2012 (10) TMI 569X X X X Extracts X X X X X X X X Extracts X X X X ..... cts are involved in both the appeals. For brevity, the facts are being extracted from ITA No. 494 of 2005. 3. This appeal has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 (in short "the Act") against the order dated 25.2.2005 passed by the Income Tax Appellate Tribunal, Chandigarh Bench "B", Chandigarh (hereinafter referred to as "the Tribunal) in ITA No. 657/CHANDI/2001, for the assessment year 1996-97, claiming the following substantial question of law:- "Whether on the facts and in the circumstances of the case the Hon'ble ITAT is correct in law in deleting the penalty of Rs. 1 lac levied u/s 271B of the Income Tax Act, 1961 for the assessment year 1996-97 despite the fact that Market Committee had turno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose of getting the accounts audited and submission of a copy of the audit report. The assessing having failed to comply with the provisions of Section 44AB of the Act, a show cause notice was issued to the assessee for imposing penalty under Section 271B of the Act. Accordingly, the Assessing Officer imposed a penalty of Rs. 1,00,000/- under Section 271B of the Act. Feeling aggrieved by the said order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [in short "the CIT(A)"]. The CIT(A) vide order dated 2.5.2001 upheld the order of the Assessing Officer and dismissed the appeal. Against the order of the CIT(A), the assessee filed appeal before the Tribunal. The Tribunal vide order dated 25.2.2005 allowed the appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 44BBB, on and from the Ist day of April, 1985 or, as the case may be, the date on which the relevant section came into force, whichever is later: Provided further that in a case where such person is required by or under any other law to get his accounts audited by an accountant, it shall be sufficient compliance with the provisions of this section if such person gets the accounts of such business or profession audited under such law before the specified date and obtains before that date the report of the audit as required under such other law and a further report in the form prescribed under this section, Explanation.- ** ** ** ** ** **" 8. Section 44AB of the Act requires every person carrying on business or p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. In other words, it has no applicability where the assessee is not involved in or has no income from profits and gains from business or profession. In the present case, it was not disputed that the income of the assessee was exempted under Section 10 (20) of the Act which falls in Chapter III of the Act. There was no income of the assessee which would fall under heading "profits and gains of business or profession". Once that was so, it could not be said that the provisions of Section 44AB were applicable and as a sequel thereto, penalty under Section 271B of the Act was not leviable. The Tribunal had rightly decided the issue in favour of the assessee. 12. In view of the above, the substantial question of law as claimed by the revenue i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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