TMI Blog2016 (3) TMI 1454X X X X Extracts X X X X X X X X Extracts X X X X ..... held that where no books of account are maintained, penalty should be imposed for non-maintenance of books of account u/s 271A and no penalty can be imposed u/s 271B for violation of section 44AB requiring audit of accounts. Thus Penalty u/s 271B ought not to have been levied because the assessee admittedly did not maintain any books of account as has been recorded in the assessment order itse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eer Sharma, Sr. DR. ORDER PER R.S. SYAL, AM: These two appeals by assessee arising out of the orders confirming penalties u/s 271B and section 271(1)(c) of the Income-tax Act, 1961 (hereinafter also called `the Act ) relate to the Assessment Year 2010-11. Since both the appeals are based on common facts, we are, therefore, proceeding to dispose them off by this consolidated order f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In this backdrop of the facts, the AO estimated the assessee s sales outside books of account at Rs.1.50 crore. By applying estimated profit rate of 5% on such sales, he made an addition of Rs.7.50 lac. That is how this solitary addition of Rs.7.50 lac was made. Thereafter, the AO imposed penalty u/s 271B and also u/s 271(1)(c) of the Act, which came to be countenanced in the first appeal. Both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctors (2008) 299 ITR 219 (All). The Hon ble Allahabad High Court reiterated the similar view in CIT and Anr. Vs. S.K. Gupta and Co. (2010) 322 ITR 86 (All) by holding that requirement of getting the books of account audited can arise only where the books of account are maintained. In the absence of the maintenance of books of account, there can be no penalty u/s 271B of the Act. In view of the for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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