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2023 (1) TMI 650 - AT - Income TaxPenalty u/s 271B - no tax audit conducted u/s 44AB - bonafide belief - Appellant contends that, in absence of any "Sale to customers", provisions of tax audit u/s 44AB of ITA, 1961 are not applicable for A.Y 2015-16 - HELD THAT:- It is an admitted fact that the assessee is in the business of builder and developer. The assessee has not got its books of account audited for the year under consideration. It is also admitted fact that the assessee was maintaining books. The only reason submitted by the assessee is that the assessee was under bonafide belief as according to the assessee ,there was no sale and assessee had only received advances from customers against the bookings. However, it is an admitted fact that the assessee follows Percentage completion method of accounting, accordingly in the Profit and Loss account. It is mandatory for an assessee whose Total Sales, Turnover, or Gross receipts exceeds Rs.1 crores to get books of accounts audited. Thus, as per the provision of the Act, either Turnover, Sales, or Gross receipts shall exceed Rs. 1 crores. The legislature has used three words, Sales, Turnover, Gross receipts. So while analyzing the business of the assessee the AO has to find out whether the Sale, Gross Receipt or turnover is more than Rs. 1 crores then provisions of Section 44AB will be applicable. Therefore, if any one of Sale, Turnover or gross receipts is more than prescribed limit the provision of Section 44AB will be applicable. When Gross profit is more than Rs.4 crores, it means the Gross Receipts were definitely more than Rs.1 crores - Assessee in the case has receipts more than Rs.1 crores. Therefore, the assessee was under obligation to audit the books of account as per section 44AB of the Act. Admittedly the assessee failed to do so. There is penalty prescribed in the Section 271B of the Act for failure to comply provisions of Section 44AB. In the case under consideration, the assessee has merely stated that it was under bonafide belief. This explanation is not acceptable as the assessee is a builder, having advice of professionals like CA. Therefore, the explanation seems to be mere eye wash. The assessee has got its Balance Sheet prepared, Profit and Loss Account prepared from professionals and these are duly signed by CA. Therefore, the explanation of the assessee is not acceptable. AO has levied minimum penalty of Rs.1,50,000/-. - any amount above Rs.1 crores will attract minimum penalty of Rs.1,50,000/-. Therefore, on the facts and circumstances of the case the penalty levied by the AO u/s 271B is upheld. Accordingly, grounds of appeal of the assessee are dismissed.
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