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2023 (4) TMI 459 - AT - Income TaxPenalty u/s 271B - violation of provisions of section 44AB and 44AA - assessee has failed to produce books of accounts and bills/vouchers for verification of purchases and other expenditures claimed in the Profit & Loss account - assessee was not found to have maintained the books of account - HELD THAT:- Assessee from the day one had been submitting before the Revenue authorities that the assessee had suffered huge losses and was booked in various cases under RBI Act for cheque dishonor and since the assessee could not settle his liabilities in due time, therefore, he was absconding from Jaipur and in this regard an FIR has already been registered against the assessee. Apart from this, assessee also had categorically mentioned that he was not maintaining any books of accounts and even the Tax Consultants of the assessee filed his ITR by collecting information available with him i.e. sales, purchases and bank book. But the said Tax Consultants has refused to sign the Tax Audit Report mainly on the ground that no books of accounts were maintained by the assessee. When assessee did not maintain regular books of accounts, then the question of getting the books of account audited does not arise at all - since there is a violation of provisions of section 44AA of the Act and the said violation cannot be extended to section 44AB of the Act. The provisions of section 44AB of the Act can only be invoked when the assessee had first complied with the provisions of section 44AA of the Act. Therefore, in my view the violation of section 44AA of the Act cannot continue because once it is found that assessee did not maintain the regular books of account then the said violation cannot travel beyond the provisions of section 44AA and hence cannot be held as further violation of section 44AB - See case of CIT vs. Bisauli Tractors [2007 (5) TMI 181 - ALLAHABAD HIGH COURT] As decided in the case of Suraj Mal Parasuram Todi [1996 (8) TMI 102 - GAUHATI HIGH COURT] wherein it was held that where no books of account are maintained, penalty should be imposed for non maintenance of books of account u/s 271A of the Act and in such circumstances no penalty can be imposed under section 271B for violation of section 44AB of the Act - Appeal of the assessee is allowed.
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