TMI Blog2021 (10) TMI 1192X X X X Extracts X X X X X X X X Extracts X X X X ..... asan, Addl. CIT ORDER PER V. DURGA RAO, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order of the learned Commissioner of Income Tax (Appeals), Puducherry in I.T.A No.63/CIT(A)-PDY/2017-18 dated 15.11.2018 relevant to the Assessment Year 2015-16. 2. The grounds of appeal raised by the assessee are reproduced as under: 1. The order of the Commissioner of Income Tax (Appeals), Puducherry dated 15.11.2018 in 1TANo.63/CIT(A)-PDY/2017-18 for the above mentioned Assessment Year is contrary to law, facts, and in the circumstances of the case. 2. The CIT (Appeals) erred in sustaining the levy of penalty u/s 271B of the Act for the presumed violation of section 44AB of the Act without assigning proper reasons and justification. 3. The CIT (Appeals) failed to appreciate that the sustenance of levy of penalty for the reasons stated from para 5 of the impugned order was not correct while further ought to have appreciated that the relevant facts which would fortify the stand of the Appellant for deleting the penalty imposed by the Assessing Officer were completely overlooked proving perversity in the findings recorded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sentence from Para l of the Judgement is produced below: Undisputedly, the assesses is not maintaining Books-of Accounts. But in this case, there existed trial balance from which balance-sheet and profit and loss account were prepared and without Books of Accounts, trial .balance could not have been prepared. The assesses cannot take strength from the Hon. High Court, judgement, since it is irrelevant to this case. Interestingly, the term. Books of Accounts is nowhere mentioned in the Section and 271-B. The term used in both the sections is accounts is a record or statement of financial expenditure and receipts relating to a particular period or purpose . Therefore, it is not necessary to have books of accounts to get the accounts audited. For instances, the accounts may be (a) Audit Through expenses. (b) Audit through projects undertaken. (c) Audit through bank statements. Therefore, the assessee s contention is without any merit and irrelevant to the present facts. Therefore, it is clear that the assessee, without reasonable cause, failed to complete with the provisions of section 44-AB of the Income Tax Act, 1961. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the obligation on the part of the assessee to maintain the books of accounts u/s. 44AA of the Act. The assessee has failed to maintain the books of accounts on that the A.O has power to impose penalty u/s. 271A of the Act. However, in the present case, the A.O has not imposed penalty u/s. 271A and imposed penalty u/s. 271B of the Act. Under similar facts and circumstances of the case, the Hon ble High Court of Allahabad has observed in the case of CIT v. Bisuali Tractors (supra), which is reproduced as under: 5. We have heard Sri A.N. Mahajan, learned standing counsel appearing for the revenue. Nobody had appeared for the respondent assessee. 6. Learned standing counsel for the revenue submitted that under Section 44AB of the Act it is obligatory on the part of the assessee whose turnover exceeded the maximum limit in the relevant previous year, to get the accounts audited and failure to do so would make liable such person for penalty as provided under Section 271B of the Act. According to him non-maintenance of account, as required under Section 44AA of the Act attracts penalty provisions under Section 271A of the Act but that would not take out the jurisdiction o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d instead proceeded to impose penalty under Section 271B of the Act. If a person has not maintained the accounts book or any accounts the question of its audit does not arise. In such an event the imposition of penalty under the provision contained in Section 271A for the alleged noncompliance of Section 44AA may arise but the provisions of Section 44AB does not get violated in case where the accounts have not been maintained at all and, therefore, penal provisions of Section 271B would not apply. It is well settled by the Apex Court in the case of CIT v. Vegetable Products Ltd. (SC) that if the language is ambiguous or capable of meanings more than one, then we have to adopt that interpretation which favours the assessee, more particularly so because the provision relates to imposition of penalty. The Constitution Bench of the Apex Court in the case of J.K. Synthetics Ltd. v. CTO has held that penalty provision in a taxing statute has to be strictly construed. Penalty is exigible only where a person falls within the four corners of the penal provisions otherwise not. Further in the tax matter interpretation in favour of the assessee has to be adopted. We may mention here that in c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed penal proceedings can be initiated only under Section 15A(1)(a) and not 15A(1)(b) of the U.P. Sales Tax Act, 1948. It has held as follows: A perusal of the two parts clearly establishes that Section 15A(1)(a) applies in a case where the dealer has failed to furnish the return under Section 7, where Sub-clause (b) applies in a case where the return has been furnished but there is deliberate concealment or the return furnished is inaccurate. The Legislature has in the two sub-clauses mentioned two different categories and has also laid down different penalties in subclause (c). They deal with different situations, and the Sales Tax Officer in this case proceeded under Section 15A(1)(a) and from the amount of penalty imposed, it is clear that he exercised his jurisdiction under Section 15A(1)(b) and not under Section 15A(1)(a). The language of the Section clearly indicates that in a case where no return has been filed penal proceedings can be initiated only under Section 15A(1)(a). There are observations in a decision of the Supreme Court in Narain Das SurajBhan v. CST which supports the view that we are taking. 10. In the case of Thoppil Kutti Eroor v. CIT the Kerala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fterthe period of four years from the close of the assessment year is not a valid return and such a case should be regarded as if no return has been filed at all and it cannot be said in such a case that there has been a concealment of the particulars of income or deliberate furnishing of inaccurate particulars and Section 28(1)(c) of the Income Tax Act, 1922 would not be applicable. The Madras High Court has held as follows: When we come to Section 28(1)(c), it deals specifically with the concealment of 'particulars' of income or the deliberate furnishing of inaccurate 'particulars' of income. In the setting in which this sub-section finds place it is impossible to construe Section 28(1)(c) except as relating to a case where a return has been filed but from which return particulars of income have been omitted or any particulars have been deliberately inaccurately furnished. The use of the expression 'particulars of his income' and 'particulars of such income' would be wholly inapposite in a case where no return has at all been filed; such a case would clearly come within the scope of Section 28(1)(a) alone. 13. This Court in CWT v. Yad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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