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TMI Blog2022 (1) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... income for A.Y. 2014-15 on 08.07.2015 declaring income of Rs. 4,53,210/-. Case selected for 'Limited Scrutiny' through CASS, followed by serving of notices 143(2) & 142(1) of the Act. During the course of assessment proceeding Ld. AO came across the information that the assessee is also engaged in share trading comprising of intra-day trading as well as delivery based trading. Information from Nirmal Bang Securities Pvt. Ltd. was called u/s 133(6) of the Act. On receiving information it was observed that total sales made by the assessee on delivery based transaction was Rs. 3,13,81,410/- which exceeded the limit of turnover of Rs. 1 cr. provided u/s 44AB of the Act which requires the assessee to get its book of accounts audited. During the course of assessment proceedings it was stated by the assessee that books of account were not maintained and since books of account were not maintained there was no possibility to get books of account audited u/s 44AB of the Act. Before the Ld. AO it was claimed that the assessee had incurred loss in the said trading of share and he was not aware as to whether he was required to get the account audited. However, Ld. AO initiated the proceedings f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Ld. CIT(A) has examined the issue in detail and in the light of settled judicial pronouncement has rightly confirmed the levy of penalty u/s 271B of the Act at Rs. 1,50,000/- observing as under: I have carefully considered the facts of the case, assessment order, written submission and arguments of the appellant. It is an undisputed fact that the turnover of the appellant in share transactions was more than Rs. 1 crore and therefore, he was liable to maintain books of account u/s 44AA and get them audited by Chartered Accounted u/s 44AB. The appellant has pleaded ignorance that he was not aware that he was liable to maintain books of accounts and to get them audited. The appellant is a retired pensioner and is an educated person. He was involved in daily routine transactions of shares and the magnitude of his turnover was more than Rs. 3 crore. In the case of the appellant, ignorance of the relevant provisions of Section 44AA and 44AB cannot be called a good defence for the appellant. Reliance is placed in the case of Anahaita Nalin Shah v. Deputy Commissioner of Income Tax - 4(1), ~ Mumbai(2014) 43 taxmann.com 206 (Mumbai - Trib.). In this identical case, the tribunal has just ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offence is complete and after that there can be no possibility of any offence as contemplated by Section 44AB. 6.1 I have perused the relevant case laws and facts & legal proposition in the present case. The provisions relating to maintenance of books of account by certain persons carrying on business and profession has been incorporated in Section 44AA in Income Tax Act. For the sake of brevity, relevant provision of Section 44AA are reproduced as below: "Section 44AA (2) Every person carrying on business and profession not being a profession referred to in sub-section (1) shall keep and maintain such books of account and other documents as may enable the Assessing Officer to compute his total income in accordance with the provisions of this Act. On plain reading of the aforementioned lines, it is clear that for the purposes of Section 44AA, there is no specific definition of the books of account to be maintained by the assessee. The section just requires the maintenance of books of account and also other documents in the form which may enable the AO to compute the total income of the appellant in accordance with the Income Tax Act, 1961. In the case of the appellant, a re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO will certainly come under the definition of books of account. Further, the appellant was also in possession of such records. In the case of S.J. Agarwal & Co. v. Income Tax Officer, Ward 5(4), Pune, (2008) 114 lTD 27 (PUNE) (SMC), Hon'ble ITAT, Pune has discussed the identical matter in details. Relying upon the decions of Hon'ble Delhi High Court in two cases, namely, (t) Central Warehousing Corpn. v. Secretary, Department of Revenue 12005] 277 ITR 452 (Delhi) and(ii) Rajesri Kumar, Proprietor, Surya Trading v. Dy. CIT [2005] 275 ITR 641 (Delhi), Hori'ble ITAT has expressed similar views. However, the issue in these cases was related to special audit ix] s 142(2A), the discussion taken place in these cases regarding the definition of books of account may be extracted herein under: "16. In the light of the decisions of the Han'ble Delhi High Court in above two cases and the expression 'accounts' used in section 44AB of the Act, it is, thus, clear that the expression 'accounts' used in section 142(.2A) or under section 44AB is not merely books of account of the assessee, but it could include books of account, balance sheets and all other reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zed. The contention of the appellant does not hold any merit. In Para 19, in the case of S.J. Agarwal & Co. v. Income Tax Officer, Ward 5(4), Pune (Supra), Hon'ble ITAT, Pune has commented as under: "19. Now the question arises as to whether for the default committed by the assessee under section 44AB, the penalty under section 271 B is still leviable. Section 273B provides that notwithstanding anything contained in the provisions of section 271 B, amongst other sections, no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the concerned provisions if he proves that there was a reasonable cause for the said failure. It is thus to be seen that as to whether the assessee has been able to prove that there was a reasonable cause Jar the assessee for not getting its accounts audited under section 44AB of the Act arui then to [furnish. the report by the specified date. The assessee's only reason given for not getting the accounts audited is that since he did not maintain any regular books or accounts or books of account the question of getting them audited under section 44AB simply did or could not arise. No other reaso ..... X X X X Extracts X X X X X X X X Extracts X X X X
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