TMI Blog2007 (7) TMI 576X X X X Extracts X X X X X X X X Extracts X X X X ..... nd other documents which may enable the Assessing Officer to compute his total income in accordance with the provisions of the Act. However, the Assessing Officer observed that the assessee failed to maintain such books of account, which could enable the Assessing Officer to compute the total income in accordance with the provisions of this Act. Therefore, the assessee committed the default. Accordingly, the Assessing Officer initiated the penalty proceedings under section 271A of the Act. Since no reply was furnished by the assessee, the Assessing Officer imposed a penalty of Rs. 25,000 under section 271A of the Act for default under section 44AA of the Act. Being aggrieved, the assessee filed an appeal before the Commissioner of Income-tax (Appeals). It was submitted before the Commissioner of Income-tax (Appeals) that the assessee was a senior citizen running a poultry farm. The sales of the assessee were more than Rs. 40 lakhs. The assessee got its accounts audited under section 44AB and filed the return, declaring therein income of Rs. 1,16,680. It was submitted that the assessee had maintained complete books of account including purchase and sale bills. In the purchase bi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f books of account by person carrying on a specified profession, the assessee carrying on business other than specified profession could not be penalized under section 271A for not retaining books of account. 2. With due respect I differ with this decision for the simple reason that section 271A contemplates imposition of penalty for the specified failure in two situations : (a) When the provisions of section 44AA have not been complied or (b) When the provisions of rules (rule 6F) have not been complied. Either of the two situations attract penalty. It is very difficult for me to agree that the Act would penalize a set of the professions and would leave the others scot-free for the same offence. Even if the specific set of books is not directed to be maintained for the businessman as per rule 6F, still as per the Income-tax Act section 44AA, it is still a specified requirement on the part of the assessee to keep and maintain such books of account and other documents as may enable the Assessing Officer to compute his total income and still get away with it. I fail to understand as to how the Assessing Officer can determine or confirm or compute the total income in the abs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n other than those mentioned in section 44AA(1) of the Act, in case income from such business or profession mentioned under sub-section (1) or sub-section (2) exceeds Rs. 1,20,000 or the total turnover/gross receipts of the business or profession exceed or exceeds Rs. 10,00,000. Sub-section (3) of section 44AA empowers the Central Board of Direct Taxes to prescribe, by rules, the books of account to be kept and maintained under sub-section (1) or sub-section (2) of the Act. He submitted that rule 6F of the Income-tax Rules, 1962, provides the books of account to be kept and maintained by persons carrying on legal, medical, engineering or architectural profession etc., mentioned in subsection (1) of section 44AA. Sub-rule (2) of rule 6F also prescribes the books of account to be maintained by persons carrying on the abovementioned businesses. However, he submitted that no such books of account have been provided for the persons carrying on business other than those mentioned under section 44AA(1). Therefore, the provisions of rule 6F are not applicable to the assessee. He relied on the decision of the Income-tax Appellate Tribunal, Nagpur Bench, in the case of ITO v. Dinesh Paper Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person carrying on legal, medical, engineering and architectural profession or the profession of accountancy or technical consultancy or interior decoration or any other profession as is notified by the Board shall keep and maintain such books of account and other documents as may enable the Assessing Officer to compute his total income in accordance with the provisions of the Act. This section is applicable only to persons carrying on the specific professions mentioned therein. Sub-section (2) of section 44AA stipulates that every person carrying on a business or profession other than those mentioned under section 44AA(1) is required to keep and maintain books of account, if his income from business or profession exceeds Rs. 1,20,000 or his total sales, turnover or gross receipts exceed or exceeds Rs. 10,00,000 in any one of the three years immediately preceding the previous year. Sub-section (3) of section 44AA empowers the Board to prescribe, by rules, the books of account and other documents to be kept and maintained by the persons specified under sub-section (1) or (2) of section 44AA. Sub-section (4) of section 44AA empowers the Board to prescribe, by rules, the period for wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Tribunal, Nagpur Bench, in the case of ITO v. Dinesh Paper Mart [1999] 70 ITD 274. Even though the provisions of rule 6F are not applicable to the assessee, yet it does not mean that the assessee was not required to maintain any books of account. The assessee was still required to keep and maintain the books of account in such a manner so as to enable the Assessing Officer to determine his total income in accordance with the provisions of the Act, because the turnover of the assessee exceeded Rs. 10,00,000. Now in this case, the assessee had maintained a cash book and ledger. All purchase vouchers were also maintained. This fact is admitted by the Assessing Officer in the assessment order. However, the Assessing Officer has mentioned that the assessee had not maintained the sale bills and stock inventory. This fact was disputed by the assessee. The assessee had emphatically contended before the Commissioner of Income-tax (Appeals) that he had maintained sale vouchers and these were also produced before the Assessing Officer. The learned Commissioner of Income-tax (Appeals) remanded this matter to the Assessing Officer. The Assessing Officer, vide his remand report dated May 30 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
