2009 (12) TMI 705 - AT - Income Tax

Summary

Issues involved: Appeal against penalty u/s 271B for failure to get accounts audited u/s 44AB for AY 2003-04.

Summary:
The assessee appealed against a penalty of Rs. 21,030 imposed by the Assessing Officer u/s 271B of the Income-tax Act, 1961 for not getting accounts audited u/s 44AB for AY 2003-04. The grounds of appeal included challenging the validity of the Assessing Officer's order, disputing the treatment of interest receipts in calculating turnover, and contesting the penalty amount. The Assessing Officer considered arhat commission and interest income in determining the turnover, leading to the penalty imposition. The Commissioner of Income-tax (Appeals) upheld the penalty citing the inapplicability of certain case laws. However, the ITAT Delhi found that the assessee had a genuine belief that only net interest income and net arhat commission should be included in turnover. As the turnover was marginally above the threshold and the assessee believed their turnover was lower, the penalty was deemed unjustified. Consequently, the penalty was deleted, and the appeal was allowed on December 4, 2009.