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2023 (11) TMI 445 - ITAT PANAJIRevision u/s 263 - As per CIT assessee was required to get its accounts audited as having a turnover of more than Rs. 1 crore, which it had not done - As assessee found that the most appropriate provision would be sec.44AD and accordingly, had estimated the profit @ 8% of its total receipts - AO has not conducted any enquiry or verification regarding why the assessee had not got its accounts audited nor had verified whether in the business of assessee, sec. 44AD would be applicable and how the assessee had claimed deduction of remuneration paid to partners. Nothing was enquired by the AO and he has simply accepted the returned income without such necessary enquiry - HELD THAT:- It is precise and clear that the turnover of the assessee during the year was more that Rs. 1 crore and as per the dictate of the provision specifically sec.44AB of the Act, such assessee has to get its accounts audited. In this case, in spite of assessee having turnover of more than Rs. 1 crore, it had failed to get the accounts audited. If we agree with the submission of the AR, then in that case in every situation where the assessee has turnover of more than Rs. 1 crore, they will not get their accounts audited and would simply rely on sec.44AD and offer 8% of receipts as taxable income, when in fact the financial statute specifies a particular action that has to be strictly followed. Alternatively going by this version of AR, sec. 44AB in the applicable case scenario would be redundant as if non-existent in the Act while simply applying sec. 44AD of the Act and this certainly is not the intent of the legislature regarding the Act. The intention and purpose of the legislator in incorporating sec. 44AB in the statute cannot be nullified and withdrawn by substituting the provisions of sec.44AD. The assessee has not only failed to get its accounts audited, but while taking benefit and recourse u/sec. 44AD, it had even deducted the remuneration paid to partners, which is not allowable as deduction u/sec. 44AD of the Act. We are inconformity with the submissions of the DR that the mandatory requirement of sec.44AB, has to be complied wherever such situation arises as per the said provisions. That, there were also no enquiry or verification on any of these aspects by the AO and he has simply accepted the returned income. Therefore, no infirmity with the order passed by the PCIT invoking jurisdiction u/sec. 263 - Decided against assessee.
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