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TMI Blog2023 (9) TMI 597X X X X Extracts X X X X X X X X Extracts X X X X ..... ved that if for some reason the assessee had not maintained books of account, then the appropriate provision under which penalty proceedings could be initiated was section 271A of the Act. On the basis of the aforesaid observations, penalty that was imposed by the A.O on the assessee firm was quashed. Penalty imposed by the A.O u/s. 271B of the Act is quashed. Appeal of assessee allowed. - Shri Ravish Sood, Judicial Member And Shri Arun Khodpia, Accountant Member For the Assessee : Shri R.B Doshi, CA For the Revenue : Shri Satya Prakash Sharma, Sr. DR ORDER PER BENCH: The captioned appeals filed by the assessee is directed against the order passed by the CIT (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 15.03.2023, which in turn arises from the order passed by the A.O. u/s. 271B of the Income-tax Act, 1961 (for short Act ), dated 27.07.2015 for A.Ys.1993-94, 1994-95 1995-96. As a common issue is involved in the captioned appeals, the same are being taken up and disposed of by way of a consolidated order. 2. We shall first take up the appeal filed by the assessee in ITA No.143/RPR/2023 for the assessment year 1993-94 as lead matte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant cannot take advantage of his own failure. namely to intimate his new address to the AO, and take recourse to the argument that penalty was imposed without providing any opportunity of being heard, thereby violating the principles of natural justice. It is trite law that any legal right, including the right to be heard, can only be availed by those who are vigilante for their rights, and not by those who sleep over them. In the case at hand, it is the appellant who has not taken the due care to intimate the Department about his new address. Therefore, it is not open to the appellant to now raise an objection as to violation of procedure by the AO in imposing penalty. This ground of appeal is dismissed. 9. In Ground No. (3), the appellant has contended that the penalty order passed by the AO is barred by limitation. 9.1 During the appellate proceeding the appellant has e written submission in respect of this ground of appeal which is produced as under: This ground of appeal is without prejudice to ground no. 1 2 and the penalty order is sought to be assailed being illegal ab initio void inasmuch as it is time barred. Following submission may kindly be consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appeal against assessment order had no bearing upon the penalty proceedings for non-compliance of various notices and therefore, if there was appeal against the assessment order, there was no valid reason to keep the penalty proceedings pending till disposal of quantum appeal. The limitation period for imposition of penalty was extended only with reference to the penalty which was linked with the addition made, which was subject matter of appeal and since the penalty under consideration is not linked with the addition made, the limitation did not get extended. 3.6 Penalty u/s 271(1)(b) has nothing to do with the amount of addition/ disallowance made in assessment and the outcome in quantum appeal did not have any bearing upon penalty u/s 271(1)(b). Therefore, sub-clause (a) of section 275(1) is not applicable. Consequently, the penalty order dated 27.07.2015 passed by AO is time barred. 3.7 In view of above explanation, it is requested that the penalty order may kindly be quashed being time barred. 9.2 In the instant case, the penalty has been imposed for failure to get his books of accounts audited as per the provisions of section 44AB of the Act. Further, the action ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice by the Ld. AR to drive home his contentions. 8. Controversy involved in the present appeal lies in a narrow compass i.e. sustainability of penalty imposed by the A.O u/s. 271B of the Act for his failure to get his books of accounts audited as per the mandate of Section 44AB of the Act. 9. At the very outset of hearing of the appeal, Shri R.B Doshi, Ld. Authorized Representative (for short AR ) for the assessee took us through the order passed by the A.O u/ss.144/147 dated 15.03.2022. Referring to the aforesaid assessment order, it was submitted by the Ld. AR that the A.O while framing the assessment had, inter alia, initiated penalty proceedings u/s. 271A of the Act i.e. for failure on the part of the assessee to maintain books of account and other documents as required u/s. 44AA of the Act. Carrying his contention further, it was submitted by the Ld. AR that the A.O had, thereafter, vide his order passed u/s. 271A of the Act dated 27.07.2015 imposed penalty of Rs. 25,000/- on the assessee. Elaborating further on his aforesaid contention, it was submitted by the Ld. AR that now when the assessee had been subjected to rigors of penalty u/s. 271A of the Act, i.e. for fail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the judgment of the Hon ble High Court of Allahabad in the case of CIT Vs. S.K Gupta Co. (supra). The substantial question of law for which indulgence of the Hon ble High Court was sought read as under: Whether, on facts and in the circumstances of the case, the learned Tribunal was legally correct in holding that there was a reasonable cause for not getting the accounts audited as no accounts were maintained, and thus the assessee could not be penalized both under ss. 271A and 271B of the IT Act, whereas the assessee being a contractor having total receipts from contract work at Rs. 1,24,69,486 has failed to maintain books of account and has not got his accounts audited under s. 44AB of the IT ct. Thereafter, the assessee has violated the provisions contained in both the sections and he is liable for penal action both under ss. 271A and 271B of the IT Act, 1961? Answering the aforesaid issue, it was observed by the Hon ble High Court that the requirement of getting the books of account audited could arise only where the books of account are maintained. It was further observed that if for some reason the assessee had not maintained books of account, then the appropri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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