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TMI Blog2023 (12) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... not getting the same audited as required u/s 44AB of the Act and therefore, the penalty levied u/s 271B is not justified and thus vacated. Penalty u/s 271A - Inspite of seven opportunities were given the assessee neither appeared nor filed any written submission so as to controvert the finding of the lower authorities. Therefore, in view of the matter we not find any infirmity in the order of the ld. CIT(A) and the thus, the levy of penalty u/s 271A stands confirmed. X X X X Extracts X X X X X X X X Extracts X X X X ..... the case." 2.1 In ITA No. 281/JP/2023, the assessee has marched this appeal on the following grounds:- "1. On the facts and circumstances of the case, the ld. CIT(Appeals) grossly erred in law and facts by approving the action of Ld. AO of holding that the assessee was liable to maintain books of accounts as per Section 44AA of the Income Tax Act, 1961 without considering the fact that in case of commission income, only commission is treated as turnover. It is hereby thus prayed to delete the penalty thus imposed. 2. On the facts and circumstances of the case, the Ld. CIT(Appeals) grossly erred in law and facts by approving the action of Ld. A.O of imposing penalty ignoring the settled legal position that no penalty can be levied where the assessment has been made on estimation basis. It is hereby thus prayed to delete the penalty thus imposed. 3. On the facts and circumstances of the case, the Ld. CIT(Appeals) grossly erred in approving the action of the Ld. A.O of imposing penalty without considering the fact that the order has been passed without affordable reasonable opportunity of being heard to the assessee and hence against the principles of natural justice. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ky Dabi for examination Statements of these persons including assessee were also recorded on 7.12.2017. After verification of these persons as well as material evidences available on record, it was established that assessee has received credits through cheques/clearings of Rs. 4,07,45,628/-on account of receipts/sales of her proprietorship concern and this being of the turnover of assessee's concern. A net profit @ 5% was estimated at Rs. 20,37,281/- and the profit is treated as assessee's income from business for the year consideration. 3.1 Penalty proceeding was initiated for non-maintenance of books of account u/s. 271A and 271B was also initiated as the assessee failed to get her books of accounted audited u/s. 44AB of the Act. The assessee was asked to show cause for both these defaults and the assessee has submitted that she has filed the appeal for the quantum additions made and has not satisfactorily explained the reasons for both the defaults for non maintenance of books of accounts and in turn failure to get them audited. Consequently, the ld. AO passed two separate order u/s. 271A & 271B for levy of penalty for an amount of Rs. 25,000/- and Rs. 1,00,000/- respectively f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o, penalty u/s 271B is leviable Therefore, the action of the AO is upheld and penalty levied of Rs. 1,00,000/- u/s 271B is hereby confirmed. Accordingly, the grounds of appeal including the additional ground of appeal is dismissed. 5. As the assessee did not find any favour from the appeal so filed before the ld. CIT(A) the assessee has preferred this appeal before the tribunal on the grounds as reiterated here in above. The bench noted that the assessee was given as much as seven opportunities but non appeared on the last date of hearing nor any adjournment application was filed. Thus, the bench feels that the assessee is not serious but considering the material available on record we proceeded to decide these appeals after hearing the ld. DR representing the revenue. 6. A propose to the grounds of appeal raised by the assessee the ld. DR representing the revenue vehemently argued that the assessee has filed return of income only after issuance of notice u/s. 148 even though the receipts in this case is for an amount of Rs. 4,07,45,628/-. Even in this appeal the assessee is not serious to pursue the appeal it shows that the assessee admits the benefit and the penalty levied bein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... travel beyond the provisions of Section 44AA and hence, cannot be held as a further violation of Section 44AB of the Act. The Hon'ble Allahabad High Court in case of CIT Vs. Bisauli Tractors (supra) while dealing with this issue as held in paras 11 to 14 as under:- "11. In the case of S. Narayanappa & Bros. v. CIT [1961] 41 ITR 125 the Mysore High Court has held as follows : "What was urged before us was that in a case where an assessee has furnished no return at all before the Income-tax Officer, it should be presumed for the purposes of section 28(1)(b) that he has furnished a return of his income intimating the Income-tax Officer that his income is nil. It seems to me that the language of section 28(1) does not admit of any such construction since the clear requirement of the provisions of this sub-section is that an assessee on whom a penalty is proposed to be imposed under section 28(1)(b) should have in the first instance furnished his return. That, in my opinion, is the ordinary and grammatical meaning of the words occurring in the Act. To interpret the language of this provision in the manner suggested by the learned Government Pleader would, in my opinion, be too ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ously been assessed under the Act does not file any return in response to the notice or even where time for filing the return has expired has not filed any return there cannot be any concealment for which penalty provision can be imposed. In view of the foregoing discussions, we are of the considered opinion that in the present case the respondent assessee has not concealed the particulars of his income for which wealth no penalty under clause (1) of sub-section (c) of section 18 of the Act is exigible. 14. Therefore, section 271B of the Act is not attracted in a case where no account has been maintained and instead recourse under section 271A can be taken." 7. A similar view has been taken by the Hon'ble Gauhati High Court in case of Surajmal Parsuram Todi vs. CIT (supra) and held in para 6 as under:- "6. We have gone through the provisions of sections 44AA, 44AB, 271A and 271B of the Act. Maintenance of accounts is envisaged under section 44AA and on failure to do so the assessee shall be guilty and liable to be penalised under section 271A. Even after maintenance of books of account the obligation of the assessee does not come to an end. He is required to do something more ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 7.5o lac, we find that this addition has resulted on estimation of income at 5% on estimated sales ITA Nos.6696 & 6645/De1/2014 of Rs. 1.50 crore. Except that there is no other basis for imposition of penalty. The Hon'ble Delhi High Court in CIT vs. Aero Traders P. Ltd. (2010) 322 ITR 316 (Del) has upheld the view taken by the Tribunal in deleting penalty u/s 271(1)(c) which was imposed on the basis of addition made by the AO on estimated profit. Similar view has been taken in a series of judgments including the Hon'ble Punjab & Haryana High Court in CIT vs. Dhillon Rice Mills (2002) 256 ITR 447 (P&H). In this case also, the Hon'ble Punjab & Haryana High Court approved the view taken by the Tribunal in deleting the penalty u/s 271(1)(c) which was based on an estimate of income made by the AO. In view of the foregoing decisions, it is clear that the penalty so confirmed in the instant case cannot be sustained because it was imposed by the AO on the estimate of income made by him. We, therefore, order for the deletion of penalty." Accordingly, in view of the binding precedent, we hold that once the assessee found to have not maintaining the regular books of accou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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