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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 ..... was cast upon him to get his accounts audited as per the mandate of the aforesaid statutory provision. We, thus, in terms of our observations above, are unable to persuade ourselves to subscribe to the penalty imposed by the A.O. u/s. 271B - Decided in favour of assessee. - Shri Ravish Sood, Judicial Member And Shri Arun Khodpia, Accountant Member For the Assessee : Shri B Subramanyam, CA For the Revenue : Shri Satya Prakash Sharma, Sr. DR ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 08.12.2022, which in turn arises from the order passed by the A.O. un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls, the assessee who is engaged in retail trading of diamond and gold/silver ornaments and is a partner in a firm, viz. M/s. Samriddhi Jewellers had filed his return of income for A.Y.2017- 18 on 27.12.2017, declaring an income of Rs. 19,13,000/-. 4. As is discernible from the records, income returned by the assessee inter alia was comprised of presumptive income from retail trading in jewellery u/s. 44AD of the Act (Page 47 of APB). On a perusal of the return of income, it transpires that the assessee had, under Section 44AD of the Act, disclosed profit @8.02% on the gross turnover/receipts of his eligible business of retail trading in jewellery of Rs. 1,22,73,090/-. The A.O. thereafter framed assessment vide his order passed u/s. 143(3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unts audited u/s. 44AB in respect of any previous year or years relevant to an assessment year, the AO may direct that such person shall pay, by way of penalty, a sum equal to one-half per cent of the total sales, turnover or gross receipts, as the case may be, in business, or of the gross receipts in profession, in such previous year or years or a sum of (one hundred fifty thousand rupees) whichever is less. The assessee has without reasonable cause, failed to get his accounts audited by the Auditor within due date as provided u/s. 139(1) of the I.T. Act, therefore, the assessee is liable to penal action u/s. 271B of the I.T.Act, 1961. After considering the facts of the case and nature of default committed by the assessee, I am satisfie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us year. The Ld AR drew our attention to the 3rd proviso to Section 44AB. The Ld AR submitted that as the gross sales/total turnover of the assessee during the year under consideration was less than the threshold limit of Rs. 2 crore provided in the 3rd proviso to Section 44AB of the Act, therefore, no obligation was cast upon him to get his accounts audited as per the mandate of the said statutory provision. 10. Per contra, the Ld. Departmental Representative (for short, DR ) relied on the orders of the lower authorities. The Ld DR submitted that one of the aspects that had weighed in the mind of the A.O while imposing penalty u/s. 271B of the Act was that as the assessee had filed his return of income in Form ITR-3 and not in F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee who had declared profit from his eligible business of retail trading in jewellery under sub-section (1) of Section 44AD of the Act would have been required to get his accounts audited only if his total sales/gross turnover of the business would have exceeded Rs. 2 crore during the previous year. For the sake of clarity, the 3rd proviso to Section 44AB of the Act is culled out as under: Provided that this section shall not apply to the person, who declares profits and gains for the previous year in accordance with the provisions of subsection (1) of section 44AD and his total sales, turnover or gross receipts, as the case may be, in business does not exceed two crore rupees in such previous year. (emphasis supplied by us) 13. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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