2022 (12) TMI 283

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..... s as a principal. In the instant case also, it is an admitted position that the assessee is only acting as a commission agent on behalf of the constituent. In view of such clarification, only the commission income is required to be reckoned for the purposes of determination of his obligation u/s 44AA of the Act as well as Section 44AB of the Act. The commission being turnover/receipt for the purposes of 44AA and 44AB, which is far below the threshold limit prescribed for the relevant assessment year, the assessee can not treated as assessee in default in terms of S. 271A and S. 271B of the Act. The assessee thus has demonstrated reasonable cause for failure to maintain books of account as well as compliance of Section 44AB of the Act .....

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..... over of the assessee stands at Rs.53,06,51,396/- which apparently exceeds the threshold provided by S. 44AA of the Act and therefore, the assessee was under obligation to keep and maintain proper books of account. Owing to such alleged default in maintaining books and 44AA and getting such accounts audited under 44AB of the Act, the AO imposed penalty of Rs.25,000/- by invoking Section 271A of the Act and Rs. 1,50,000/- by invoking Section 271B of the Act. In the first appeal, the CIT(A) confirmed the aforesaid action of the Assessing Officer. 6. Aggrieved, the assessee preferred appeal before the Tribunal. 7. We have perused the respective penalty orders and the first appellate orders thereon passed under Section 271A 271B of the A .....

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..... earned a miniscule commission income of Rs.50/- to Rs.100/- per lakh on gross basis and the IT Department has assessed his commission income at Rs.70/- per lakh in the previous assessment years on gross basis. The assessee also contended that the property in goods or significant risks reward of ownership of goods continue to belong to the constituent on whose behalf the assessee has acted upon and he was merely concerned with his commission income for the services rendered. 10. In the factual context, we straightaway take notice of Circular No.452 dated 17th March, 1986 issued by the CBDT wherein the question of applicability of Section 44AB in the case of commission agents/arhatias was addressed. The Board has clarified that the turno .....

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