9911796707
TMI Blog2025 (1) TMI 813X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case are that the assessee e-filed return of income for the assessment year 2018-19 on 25.07.2018, declaring income of Rs. 4,28,200/-. The case of the assessee was selected by Revenue for framing scrutiny assessment under CASS. Notices u/s. 143(2) and 142(1) were issued by the Assessing Officer to the assessee, during the course of assessment proceedings. There was a cash deposit to the tune of Rs. 5,21,89,264/- in the bank accounts of the assessee with the ICICI Bank. The assessee submitted during the course of assessment proceedings that the assessee is engaged in commission business of cash handling. The assessee submitted that Firozabad, being a glass industries city, the customers from different parts of the country come to Firo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account audited within the prescribed time. The AO observed that no reasonable cause has been submitted by the assessee for non-compliance of statutory provisions and hence, the Assessing Officer levied penalty of Rs. 1,50,000/- u/s. 271B of the Act against the assessee as the assessee's turnover/gross receipts of the assessee are to the tune of Rs. 5,83,35,487/-,vide penalty order dated 16.03.2022 u/s 271B. 3. Aggrieved, the assessee filed first appeal with the learned CIT(Appeals). During first appellate proceedings, the ld. CIT(Appeals) issued only one notice dated 29.12.2022 asking the assessee to submit reply latest by 06.01.2023. The assessee did not file any reply and hence, ld. CIT(Appeals) dismissed the appeal of the assessee on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the assessee has gross receipts/turnover of Rs. 5,83,35,487/- during the assessment year. The assessee was asked by the AO to explain the same. The assessee submitted during the course of assessment proceedings that the assessee is engaged in commission business of cash handling. The assessee submitted that Firozabad, being a glass industries city, the customers from different parts of the country come to Firozabad to buy bangles and other glass hardware. To mitigate the risks, the assessee handles cash of customers and make payments for purchases effected by them on their behalf. The AO called for the details of customers who deposited cash in the assessee's account. During quantum assessment proceedings, the assessee expressed its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st appeal before ld. CIT(A) against the penalty imposed by the AO u/s 271A against the assessee, which is also still pending for disposal before ld. CIT(A). Section 271A concerns itself with imposition of penalty for failure to keep, maintain or retain books of accounts, documents etc.. As per provisions of section 44AB, the tax audit, inter-alia, is applicable only when gross receipts, total sales or turnover from business exceed one crore of rupees. The assessee in its first appeal filed before the ld. CIT(Appeals) vide ground No. 2 has stated that the assessee was not carrying on any business activities, which require maintaining of books of account/audit in terms of section 44AB and the Assessing Officer has erred in holding entire rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appeal filed by the assessee against levy of penalty of Rs. 1,50,000/- u/s. 271B of the Act, without first deciding the first appeal filed by the assessee against quantum assessment. The assessee has raised grounds before the ITAT raising legal challenge that the assessee's was not liable to tax-audit u/s 44AB, vide ground of appeal number 2 raised in memo of appeal filed with ITAT. The assessee has also raised vide ground of appeal vide ground number 3 in memo of appeal filed before ITAT that provisions of Section 271B cannot be invoked before finalization of the quantum appeal by ld. CIT(A). In any case, the ld. CIT(A) has passed an ex-parte appellate order dated 10.02.2023 confirming the penalty of Rs. 1,50,000/- levied by the AO u/s 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest of justice and fairness to both the parties, the appellate order dated 10.02.2023 passed by ld. CIT(Appeals) is set aside and the matter is restored back to the file of ld. CIT(Appeals) to adjudicate afresh the first appeal filed by the assessee against the penalty levied by the AO u/s 271B, which appeal shall be decided after the adjudication of the first appeal filed by the assessee against quantum assessment, after providing reasonable opportunity of hearing to both the parties. I clarify that I have not commented upon the merits of the issues arising in this appeal. I also direct the assessee to co-operate in the first appellate proceedings, and does not seek un-necessary adjournments, otherwise the ld. CIT(A) shall be free to a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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