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TMI Blog2022 (9) TMI 719X X X X Extracts X X X X X X X X Extracts X X X X ..... ery case of default but the AO shall issue a notice to the assessee for affording the opportunity of hearing. Penalty under the provisions of section 271B of the Act is not automatic. Likewise, the provisions of section 273B of the Act provides that there shall not be any penalty if the assessee fails to get its accounts audited under the provisions of section 44 AB of the Act if he proves that there was reasonable cause for the said failure. Admittedly, in the given case the income declared by the assessee in the return of income has been admitted by the revenue without any variation though the assessee has furnished necessary documents in support of the return filed by him. This fact can be verified from the observations of the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) erred in confirming the penalty levied by the AO for ₹ 1,50,000/- under the provisions of section 271B of the Act on account of failure of getting the accounts audited. 3. The facts in brief are that the assessee in the present case is an individual and running his proprietary concern from retail trade of milk and milk products. The AO during the assessment proceedings found that the turnover of the assessee from his business stands at ₹ 7,92,73,920.00 which exceeds the threshold limit specified under the provisions of section 44AB of the Act for getting the accounts audited. But the assessee failed get the accounts audited and therefore the AO levied the penalty for a sum of ₹1,50,000 under the provisions of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome of the assessee was not disturbed during the assessment proceedings. The purpose of getting the accounts was to find whether there was no loss to the revenue insofar the income disclosed by the assessee. As there was no change in the income declared by the assessee, then the assessee cannot be visited with the penalty under the provisions of section 271B of the Act. The learned AR in view of the above prayed that penalty under the provisions of section 271B should not be levied in the given facts and circumstances. 8. On the other hand the learned DR vehemently supported the order of the authorities below. 9. We have heard the rival contentions of both the parties and perused the materials available on record. Admittedly, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h may be taken by the assessee in order to escape from the penalty, the AO may come to the conclusion whether any penalty is imposable or not. Accordingly, we note that the penalty under the provisions of section 271B of the Act is not automatic. Likewise, the provisions of section 273B of the Act provides that there shall not be any penalty if the assessee fails to get its accounts audited under the provisions of section 44 AB of the Act if he proves that there was reasonable cause for the said failure. The provisions of section 273B is extracted below: 273B. Penalty not to be imposed in certain cases: Notwithstanding anything contained in the provisions of [Clause (b) of sub-Section(1) of Section 271, Section 271A, Section 271AA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts of Form Nos. 3CA/3CB and 3CD, a proper audit for tax purposes would ensure that the books of account and other records are properly maintained, that they truly reflect the income of the taxpayer and claims for deduction are correctly made by him. Such audit would also help in checking fraudulent practices. It can also facilitate the administration of tax laws by a proper presentation of accounts before the tax authorities and considerably save the time of Assessing Officers in carrying out routine verifications, like checking correctness of totals and verifying whether purchases and sales are properly vouched for or not. Admittedly, in the given case the income declared by the assessee in the return of income has been admitted by the re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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