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2016 (8) TMI 858

Head Note / Extract:
Penalty u/s 271B - threshold limit for getting its account audited u/s 44AB - Business activity or professional activity - receipts from the pathological laboratory have to be considered as business receipts - Held that:- Without first holding that the assessee was a professionally qualified medical doctor the Revenue cannot avoid the conclusion that the receipts from the pathological laboratory have to be considered as business receipts, as for earning professional receipts holding of a professional qualification would be sine qua non. The threshold limit for getting accounts audited in the case of business receipts admittedly for the year under consideration have been set by the statute at Rs. one crore.

The occasion for imposing penalty under section 271B did not arise. In such a situation, where the assessee does not hold any professional medical qualification, we do not see how it can be held that the assessee is carrying on a profession as the venture carried on with the help of technically qualified people necessarily would fall in the category of "carrying on business" wherein the statutory threshold for getting accounts audited has been fixed at Rs. one crore. Accordingly, we find that in the facts of the present case, considering the claim of the assessee put forth before the Commissioner of Income-tax (Appeals) stated to have been identically made before the Assessing Officer also, we hold that the penalty under section 271B wherein the gross receipts were only ₹ 42 lakhs.

Accordingly, examining the issue from all angles, we find that in the facts of the present case, the penalty imposed under section 271B deserves to be quashed. As not only on facts, it could not have been imposed but even otherwise considering the explanation of the assessee in the facts of the present case, it should have been quashed on the grounds of reasonable cause. - Decided in favour of assessee

 

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