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TMI Blog2022 (4) TMI 1270X X X X Extracts X X X X X X X X Extracts X X X X ..... lected for limited scrutiny to verify the derivative (future) transaction and securities transactions. Thus we are of the view that there is no requirement for getting the accounts audited u/s 44AB of the Act as the turnover is less than the prescribed limit. Accordingly, we set aside the order of Ld. CIT(A) and direct the AO to delete the penalty. - Decided in favour of assessee. - I.T.A. No. 484/Kol/2020 - - - Dated:- 22-4-2022 - Shri Rajesh Kumar, Hon ble Accountant Member And Shri Sonjoy Sarma, Hon ble Judicial Member For the Assessee : Shri Somnath Ghosh, Advocate For the Revenue : Smt. Ranu Biswas, ACIT ORDER PER SONJOY SARMA, JM This appeal filed by the assessee for A.Y. 2015-16 against the order dated 28.07.2020 passed by the Ld. CIT(A) 13, Kolkata. The assessee in this appeal has taken the following grounds: 1. FOR THAT the Ld. Commissioner of Income Tax (Appeals)-13, Kolkata failed to appreciate that none of the conditions precedent required to be satisfied for the assumption of jurisdiction u/s. 27 IB of the Income Tax Act, 1961 existed and/or have been complied with and/or fulfilled in the instant case by the Ld. Income Tax Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statements, ledger of Angel Broking Pvt. Ltd., the broker of the assessee and derivative trading script wise details which were perused and kept on record. The transactions of shares were cross verified on test check basis with the transaction records furnished by the broker of the assessee in response to notice sent u/s 133(6) of the Income Tax Act. However, the AO found during the assessment proceeding that the assessee failed to comply with provisions as laid down in section 44AB of the Act as the assessee was involved in delivery based as well as non-delivery based trading of shares and securities and thus had speculative income/loss non-speculative business income/loss as per the provisions laid down in section 43(5) of the I.T. Act and therefore, provisions of section 44AB are applicable to the assessee. Accordingly a show cause notice dated 27.09.2017 was issued upon the assessee stating that as to why penal provisions of section 271B should not be involved in her case, but AO was not getting any response from the assessee. Accordingly penalty proceedings u/s 271B of the Income Tax Act, 1961 was initiated upon the assessee separately. 3. That during the penalty proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der to notice u/s. 27IB of the Act filed before A.O. 12 4. Copy of notice dated 07-12-2017 issued u/s. 27IB of the Act by A.O. 14 5. Copy of assessment order u/s. 143(3) of the Act framed by A.O. 15 6. Copy of rejoinder to notice dated 27-09-2017 filed before A.O. 20 7. Copy of notice dated 27-09-2017 issued by A.O. 21 8. Copy of rejoinder to notice filed before A.O. 22 9. Copy of computation of loss of Future Options filed before A.O. 23 10. Copy of D-mat statement of the appellant filed before A.O. 25 11. Copy of rejoinder to notice u/s. 143(2) of the Act filed before A.O. 40 12. Copy of Ledger account of Angel Broking Pvt. Ltd filed before A.O. 41 13. Copy of details of receipt payment made by the appellant filed before A.O. 45 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vailable on record, we find that the AO imposed penalty for not getting the accounts audited as according to the AO turnover exceeds the threshold limit as prescribed u/s 44AB of the Act. We note that the assessee is doing non-delivery based transactions and in such case the turnover has to be determined on the basis of the net of sales and purchase of shares. Further the default committed by the assessee is of technical nature and the AO was not handicapped for want of tax audit report while making assessment under appeal. 9. The case of the assessee is squarely covered by the decision of coordinate bench of the Tribunal in the case of The Kalna Town Credit Co-operative Bank Ltd. vs ITO operative part is reproduced as under: 5. We have heard the rival submissions and perused the orders of the authorities below. We find that the explanation of the assessee for not filing the Tax Audit Report within the prescribed due date was that the Manager who is generally responsible for looking after the income-tax matters of the bank was under suspension since 5.5.1997 and there was no alternative arrangement in his place till June, 2000. From the order of the Ld. C.I.T.(A) we al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 10. Keeping in view all the facts and circumstances of the case and relying on the decision of the coordinate bench of the Tribunal in the case of The Kalna Town Credit Cooperative Bank Ltd. (supra), we are of the view that the default committed by the assessee is a technical or venial nature. Beside that the assessment was selected for limited scrutiny to verify the derivative (future) transaction and securities transactions. The case of the assessee is squarely covered by the decision of coordinate bench of the Tribunal in the case of Shri Dwaraknath Krishnaram vs ITO, the operative part whereof is as under: 6. In the present case, it is clear from the assessment order which shows that the assessment was selected for limited scrutiny to verify the derivatives, (Futures Transactions and Securities Transactions). The assessee has disclosed the loss against the Futures and Options as a speculative loss. However, the Assessing Officer treated the same as a business transaction. A perusal of the decision of the Co-ordinate Bench of this Tribunal, Pune Benches in the case of Banwari Sitaram Pasari [HUF] vs. Assistant Commission of Income Tax shows that the Co-ordinate Bench ..... X X X X Extracts X X X X X X X X Extracts X X X X
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