2023 (9) TMI 799 - ITAT RAIPUR

Levy of penalty u/s 271B - assessee failed to get accounts audited as per provisions of section 44AB - non maintenance of books of accounts by assessee - appellant was under the misbelief that if the income declare is above 8% of gross profit, then he is not required to get its accounted audited - HELD THAT:- As apparent from the records that assessee because of her bonafide belief may be wrong has not maintained any books of account and, therefore, it was impossible to get the accounts audited which were not even ever prepared/maintained.

The ratio of law as interpreted in the case of CIT vs. Bisauli Tractors (2007 (5) TMI 181 - ALLAHABAD HIGH COURT) on which the assessee placed reliance wherein the Hon’ble High Court has concluded that the penalty u/s 271B of the Income Tax Act is not attracted in case where no account has been maintained instead recourse u/s 271A can be taken.

Since, the Ld. AO appreciated the fact that assessee has not maintained any books of account but have not initiated any penalty proceedings u/s 271A for non - maintaining to books, instead the Ld. AO proposed to initiate the penalty proceedings u/s 271B of the Act for not getting the books audited which is very impractical thinking of the AO when the books of accounts are not available, how the audit of the same can be conducted. Thus penalty u/s 271B for not getting the books of account audited is impossible to be imposed when it is an evident fact that there was no books of account maintained by the assessee. Appeal of the assessee is allowed.