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TMI Blog2023 (8) TMI 961X X X X Extracts X X X X X X X X Extracts X X X X ..... for the assessment year 2017-18. The assessee has assailed the impugned order on the following grounds of appeal before us : "1. That the order of Ld. CIT(A) has erred is bad in law as well as on facts. 2. The Learned CIT(A) has erred in law and on facts in upholding the validity of the order passed by the Income Tax Officer dated 12/01/2022 under section 271B of the Act which is bad in law and invalid. 3. The Ld. CIT(A) has erred in law and on facts in sustaining the order of the Assessing Officer levying penalty under section 271B of the income tax act amounting to Rs. 61,365/-. 4. Without prejudice to above, the order passed by Ld. CIT (Appeals) is illegal, ab initio void & unsustainable as the same has been passed without givin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 48,520/-. The A.O. in the body of the assessment order initiated penalty proceedings u/s. 271B of the Act. 5. After putting the assessee to notice and considering his reply, the A.O. observed that the assessee had, without reasonable cause, failed to get his accounts audited and furnished a tax audit report within the stipulated period as required under Sec. 44AB of the Act. Accordingly, the A.O. vide his order dated 12.01.2022 saddled the assessee with a penalty of Rs. 61,365/- u/s. 271B of the Act. 6. Aggrieved the assessee carried the matter in appeal before the CIT(Appeals) but without success. The CIT(Appeals), while upholding the penalty imposed by the A.O u/s. 271B of the Act, observed as under: "5. DECISION: All the grounds of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 44AB of the Act assessee firm was liable to maintain books of account and get its audited as it receipts exceeds the threshold limit. However, assessee failed to do so that also without any reasonable cause. Therefore, the penalty levied by the A.O u/s. 271B is justify and the same is confirmed. Hence, all the grounds are dismissed." 7. The assessee, being aggrieved with the order of the CIT(Appeals), has carried the matter in appeal before us. 8. We have heard the ld. Authorized representatives of both the parties, perused the orders of the lower authorities and the material available on record and considered the judicial pronouncements that had been pressed into service by them to drive home their respective contentions. 9. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he "3rd proviso" to Section 44AB of the Act was not applicable in his case. 11. We have thoughtfully considered the issue before us in the backdrop of the contentions advanced by the Ld. ARs of both parties. Admittedly it is a matter of fact borne from the record that the assessee had, inter alia, disclosed his income from the eligible business of trading in jewellery under the presumptive scheme of taxation contemplated in Sec. 44AD of the Act, i.e., @8.02% of his gross turnover/total sales of Rs. 1.22 crore (supra). On a perusal of the records, the assessee's income (including income declared u/s. 44AD of the Act) has thereafter been assessed by the A.O. vide his order passed u/s. 143(3) of the Act dated 30.12.2019. It is not the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i.e., @8.02% was substantially less than the threshold limit of two crore rupees as envisaged in the "3rd proviso" to Section 44AB of the Act; therefore, we concur with the claim of the Ld. AR that no obligation was cast upon him to get his accounts audited as per the mandate of the aforesaid statutory provision. 14. We, thus, in terms of our observations above, are unable to persuade ourselves to subscribe to the penalty of Rs. 61,365/- imposed by the A.O. u/s. 271B of the Act, which thereafter had been upheld by the CIT(Appeals), and vacate the same. Accordingly, we set aside the order of the CIT(Appeals) and vacate the penalty of Rs. 61,365/- imposed by the A.O. u/s 271B of the Act. 15. In the result, the assessee's appeal is allo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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