TMI Blog2014 (12) TMI 440X X X X Extracts X X X X X X X X Extracts X X X X ..... over - Since the turnover exceeded ₹ 40 lacs for the relevant year the books of accounts was liable to be audited u/s 44AB. Books of accounts not audited – Validity of initiation of penalty proceedings u/s 271B – Held that:- It has not come on record that the assessee had not maintained any books of account - in view of Section 237B of the Act if a reasonable explanation is given, the penalty proceedings initiated u/s 271B being discretionary could be dropped or a lesser penalty could be imposed - assessee was carrying on the business of sale of gas cylinders and since his turnover was more than ₹ 40 lacs the appellant was under an obligation to get his books of account audited under Section 44AB - since the books of account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reply contending that since no order has been passed no penalty proceedings could be initiated. The appellant further submitted that the appellant had not made any purchases from the bottling plant nor had sold any gas and that whatever goods were sent by the corporation, the ownership of those goods remained with the corporation and that the appellant was only allowed to take commission and, consequently, the provision of Section 44AB of the Act was not applicable. The Assessing Officer did not agree with the submission of the appellant and passed an order under Section 271B of the Act imposing a penalty of ₹ 86,880/- being half percent of the total turnover, which he assessed at ₹ 1,73,75,938/-. The appellant, being aggrie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the appellant was carrying on business of supply of gas cylinders to the consumers and that the assessee was carrying on the business of purchase and sale of gas cylinders and not on a commission basis. Consequently, the sale of gas cylinders was liable to be included on the turnover of the appellant. Since the turnover exceeded ₹ 40 lacs for the relevant year in question the books of accounts was liable to be audited under Section 44AB of the Act. Since the books of accounts were not audited, penalty proceedings were initiated under Section 271B of the Act. Section 271B of the Act provides that if any person fails to get his accounts audited as required under Section 44AB of the Act, the Assessing Officer may direct that suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee had not maintained any books of account. In the light of this assertion being absent, the decision of a Division Bench of this Court in S.K. Gupta and Co. (supra) is not applicable. No doubt, in view of Section 237B of the Act if a reasonable explanation is given, the penalty proceedings initiated under Section 271B being discretionary could be dropped or a lesser penalty could be imposed. In the instant case, we find that the appellant was carrying on the business of sale of gas cylinders and since his turnover was more than ₹ 40 lacs the appellant was under an obligation to get his books of account audited under Section 44AB. Since the books of account was not audited, penalty proceedings were rightly initiated. We find that e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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