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TMI Blog2012 (11) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... tly contended by the learned Counsel for the assessee. The benchmark of 5% therefore was not the basis for the assessee who filed returns according to the audit report u/s.44AB. Therefore, the initiation of proceedings u/s.147 having been initiated by the Assessing Officer for the reason the assessee having violated the provisions of Section 44AF was not at all correct in view of the audit report furnished by the assessee, in our considered view the assessment orders and also the consequential penalty orders for both the AYs under consideration cannot be sustained. - I.T.A.Nos.396,397,398,399,400 and 401/CTK/2012 - - - Dated:- 13-7-2012 - Shri K.K.Gupta And Shri K.S.S.Prasad Rao, JJ. For the Appellant: Shri S.N.Sahu, AR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s.271(1)(b) for non-compliance and u/s.271(1)(c) holding a view the addition was the result of submission of inaccurate particulars of income in violation to the provisions of Section 44AF. 3. Aggrieved, the assessee appealed before the CIT(A) and the learned CIT(A) confirmed the assessments made u/s.144/147 as well as the penalties u/s.271(1)(b) and u/s.271(1)(c) for both the AYs under consideration. Hence, the assessee has filed these appeals before the Tribunal. 4. The learned AR of the assessee initiating his arguments submitted that the assessee derives income from retail sale of medicine. He has maintained books of accounts and those were duly audited u/s.44AB. In support, he furnished the audit report wherein the auditors in F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s.147 ought to be annulled. He, therefore, prayed to set aside the impugned orders of the learned CIT(A) and direct the Assessing Officer to accept the income as returned by the assessee for both the AYs under consideration and also cancel the consequential penalties u/s.271(1)(b) and u/s.271(1)(c). 5. The learned DR, on the other hand, supported the impugned orders of the authorities below. He contended that the assessee failed to avail opportunities allowed by the Assessing Officer to produce the books of accounts., to establish assessment under the provisions of Section 44AB. Therefore, the resultant assessments made u/s.144/147 and consequential penalties levied by the Assessing Officer cannot be faulted with. In that view of the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the previous year. But the present case, the assessee has maintained books of account on the basis of which the auditors have prepared the audit report as required u/s.44AB but the turnover of the assessee not having exceeded Rs. 40 lakhs. Section 44AB provides interalia that every person carrying on the business shall, if the profits and gains from the business are deemed to be the profits and gains of such person under Section 44AF and he has claimed his income to be lower than the profits or gains so deemed to be the profits and gains of his business, as the case may be, in any previous year get his accounts of such previous year audited by an accountant before the specified date and furnish by that date the report of such audit in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned CIT(A) is not justified in not considering the audit report furnished before him. Had it been considered by the learned CIT(A), since the assessee maintained books of account duly audited u/s.44AB, there is no scope for application of the provisions of Section 44AF, as rightly contended by the learned Counsel for the assessee. The benchmark of 5% therefore was not the basis for the assessee who filed returns according to the audit report u/s.44AB. Therefore, the initiation of proceedings u/s.147 having been initiated by the Assessing Officer for the reason the assessee having violated the provisions of Section 44AF was not at all correct in view of the audit report furnished by the assessee, in our considered view the assessment ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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