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TMI Blog2018 (3) TMI 429X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 271B - not obtaining the audit report as required under section 44AB - efault committed by the assessee - Held that:- As find from the income tax returns for the assessment years 2012-13 and 2013-14 filed by the assessee that the assessee has shown business income from the sale of recharge vouchers and not shown as turnover. Perusal of the order in the case of Anoop Kumar Beri (2004 (7) TMI 305 - ITAT DELHI-F ) find that the assessee was under bonafide belief that receipts from commission were not to be included for the purpose of determining the obligation of audit under section 44AB and same constituted a reasonable cause for not getting the accounts audited. In the present case, the income shown by the assessee is from the commission on sale of recharge vouchers, which alone can be treated as assessee’s turnover. Thus the default committed by the assessee in not presenting the audit report is exonorable and we do not find any mala fide on the part of the assessee in this way. Hence, we delete the penalty imposed u/s.271B - Decided in favour of assessee - ITA No. 421 & 142 /CTK/2016 - - - Dated:- 8-3-2018 - Shri N.S Saini, Accountant Member And Pavan Kumar Gadale, Judicia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oucher would have delayed by four to five days thereby severely affecting the business operation. ii) That the AO accepted the version of Umesh Nayak but disbelieved the version of the appellant on the quantum of cash payments in a day. That the relationship between the Prop of M/s. stock Point and appellant is of a principal and agent and that the e-recharge vouchers are not goods in real sense. The assessee also relied on the judicial decision in the case of CIT vs. P Pravin Co. (2005) 274 ITR 534 and submitted that the provisions of section 40A(3) are not attracted in her case whereas the CIT(A) confirmed the action of the Assessing Officer. 6. Aggrieved with the order of the CIT(A), the assessee has filed an appeal with the Tribunal. 7. Ld A.R. of the assessee submitted that the assessee was purchasing recharge vouchers from M/s. Stock Point, Puri and following the system of payment consistently from the earlier years and revenue has accepted further in the sale of recharge the assessee is entitled only percentage of commission/discount on sale of such vouchers and the assessee continued to make cash payment, otherwise, the business of the assessee would have a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ock Point in his statement recorded u/s.131 of the Act and there is no dispute about the sales figure and transaction and revenue has accepted the same. Further, Ld A.R. relied on the decision of Cochin Bench of the Tribunal in the case of S.Rahumathulla (supra), wherein, on similar situation, it was held that there was only a relationship of a principal and agent and, therefore, there was no question of any purchase being affected by the latter and, accordingly, the Bench concluded that there was no question of allowance of any expenditure in respect of purchases qua which the provisions of section 40A(3) of the Act could apply, irrespective of the mode of payments. Ld A.R. also relied on the decision of Hon ble Gujarat High Court in the case of Anupam Teleservices (supra), wherein also, the assessee was dealing in recharge vouchers and made cash payments on the ground that on account of cheque payment, it will take 4/5 days to clear the payments and, therefore, there will be an adverse impact on the financial position and business operation. Ld A.R. of the assessee also relied on the decision of Pune Benches of the Tribunal in the case of Doshi Vijaykumar Motilal (supra), wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here there was an apparent violation of the provision, so that the Revenue's appeal contesting the order of the Tribunal stood dismissed by the Hon'ble Court 10. We find that there is no dispute to the genuineness of the payment by the assessee and identity of the sellers. The provisions of section 40A(3) are not intended to restrict the business activities but to caution that payments exceeding ₹ 20,000/- are made in cheque/draft. The provisions of section 40A(3) of the Act are to be in consonance with business expediency trade practice and other genuine relevant factors. In this present case, the assessee has intimated the circumstances under which the assessee was compelled to make the cash payments and also the genuineness of payment and the identity of the payee is not doubted. Considering the circumstances, business expediency and judicial decisions dealt above, we are of the substantive view that the provisions of section 40A(3) of the Act shall not be a hindrance in the business operation of the assessee, who has been following such pattern from earlier years and on the principle of going concern which the revenue has not doubted. Accordingly, we set asid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned the requisite tax audit report or not. The assessee has contended that although the audit report was prepared on 24.9.2011 but due to certain circumstances, it was furnished during assessment proceedings and there was no malafide intention in this regard. It is not case of the revenue that the assessee has not furnished the audit report. 16. We also find from the income tax returns for the assessment years 2012-13 and 2013-14 filed by the assessee that the assessee has shown business income from the sale of recharge vouchers and not shown as turnover. We also on perusal of the order of the Delhi Bench of the Tribunal in the case of Anoop Kumar Beri (supra) find that the assessee was under bonafide belief that receipts from commission were not to be included for the purpose of determining the obligation of audit under section 44AB and same constituted a reasonable cause for not getting the accounts audited. In the present case, the income shown by the assessee is from the commission on sale of recharge vouchers, which alone can be treated as assessee s turnover. Therefore, respectfully following the decision in the case of Anoop Kumar Beri (supra), we are of the considered op ..... X X X X Extracts X X X X X X X X Extracts X X X X
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