2019 (12) TMI 201

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..... the AY 2007-08 on 28/08/2007 declaring total income of Rs. 1,68,370/-. The AO observed that assessee's total gross receipts from business were Rs. 58,62,880/- and no audit was done in assessee's case, as total sales turnover or gross receipts of business exceed Rs. 40 lakshs, the assessee should have got his accounts audited by an Accountant before the specified date in the prescribed form duly signed and verified by such Account but, the assessee failed to get his accounts audited as required u/s 44AB of the Act. 2.1 The AO, accordingly, issued penalty notice u/s 271B on 24/12/2012. Against the said notice, the assessee submitted that the assessee is running a Kirana & General Stores and he is filing return of income in which showing busi .....

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..... urged at the time of hearing." 5. Considered the rival submissions and perused the material on record. Admittedly, the assessee before the revenue authorities submitted that he is filing return of income in which showing business income u/s 44AF on the ground that he is not maintaining books of account. A Separate penalty has been provided for non maintenance of accounts, i.e. under section 271A of the Act and for not getting the accounts audited and not furnishing the audit report, i.e. under section 271B. If a person has not maintained account books or any accounts the question of audit does not arise. In such an event the imposition of penalty under the provision contained in section 271A for alleged non-compliance with section 44AA may .....

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..... ome by suppressing the gross receipts and hence, worked out the penalty on the amount of tax sought to be evaded at Rs. 46,532/- u/s 271(1)(c) of the Act. 9. When the assessee preferred an appeal before the CIT(A), the CIT(A) upheld the penalty levied by the AO u/s 271(1)(c). 10. Considered the rival submissions and perused the material on record. In the instant case, the additions on which the penalty was imposed was estimated after applying the net profit rate and that it was a settled law that penalty on ad hoc disallowance or addition made on estimate basis was not attracted. The Hon'ble Delhi High Court in CIT vs. Aero Traders Pvt. Ltd., reported in 322 ITR 316 (Del), has held that no penalty u/s 271(1)(c) can be imposed when income .....

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