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2022 (12) TMI 283 - AT - Income TaxPenalty u/s 271A - non maintenance of books in infringement of S. 44AA - Penalty u/s 271B - not furnishing tax audit report enjoined by S. 44AB of the Act - HELD THAT:- We straightaway take notice of Circular No.452 dated 17th March, 1986 issued by the CBDT wherein the question of applicability of Section 44AB in the case of commission agents/arhatias was addressed. The Board has clarified that the turnover does not include the sales affected on behalf of the principals and only the gross commission has to be considered for the purposes of section 44AB where the agents act only as an agent of his constituent and never acts as a principal. In the instant case also, it is an admitted position that the assessee is only acting as a commission agent on behalf of the constituent. In view of such clarification, only the commission income is required to be reckoned for the purposes of determination of his obligation u/s 44AA of the Act as well as Section 44AB of the Act. The commission being turnover/receipt for the purposes of 44AA and 44AB, which is far below the threshold limit prescribed for the relevant assessment year, the assessee can not treated as assessee in default in terms of S. 271A and S. 271B of the Act. The assessee thus has demonstrated reasonable cause for failure to maintain books of account as well as compliance of Section 44AB of the Act in term of Section 271B of the Act. The penalty imposed u/s 271A and Section 271B of the Act is quashed. Appeal of assessee allowed.
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