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Sushila Sharma Versus Income-Tax Officer

Penalty u/s 271B - threshold limit for getting its account audited u/s 44AB - Business activity or professional activity - receipts from the pathological laboratory have to be considered as business receipts - Held that:- Without first holding that the assessee was a professionally qualified medical doctor the Revenue cannot avoid the conclusion that the receipts from the pathological laboratory have to be considered as business receipts, as for earning professional receipts holding of a profess .....

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lp of technically qualified people necessarily would fall in the category of "carrying on business" wherein the statutory threshold for getting accounts audited has been fixed at Rs. one crore. Accordingly, we find that in the facts of the present case, considering the claim of the assessee put forth before the Commissioner of Income-tax (Appeals) stated to have been identically made before the Assessing Officer also, we hold that the penalty under section 271B wherein the gross receipts were on .....

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icial Member) And Prashant Maharishi (Accountant Member) For the Appellant : Premlata Bansal, Advocate For the Respondent : K. K. Jaiswal, Departmental Representative ORDER Diva Singh (Judicial Member) 1. The present appeal has been filed by the assessee assailing the correctness of the order dated November 5, 2015, of the Commissioner of Income-tax (Appeals)-20, New Delhi, pertaining to the 2013-14 assessment year on the following grounds : "1. That the learned Commissioner of Income-tax ( .....

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hat the appellant seeks leave to add, amend, alter, abandon or substitute any of the above grounds during the hearing of the appeal." 2. The relevant facts of the case are that the assessee declared an income of ₹ 4,15,000. The Assessing Officer taking note of the fact that the accounts of the assessee were not audited, initiated penalty proceedings under section 271B. Finding that the assessee was a doctor by profession and she had received professional receipts amounting to ₹ .....

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onic form. Since despite opportunities the assessee made no compliance before the Assessing Officer, penalty amounting to ₹ 21,289 was imposed. 3. The assessee was unsuccessful in its appeal before the Commissioner of Income-tax (Appeals) whereas the explanation offered on behalf of the assessee has been extracted on page 4 of the impugned order, however, finding it to be not convincing the appeal of the assessee was dismissed by the Commissioner of Income-tax (Appeals). 4. Aggrieved by th .....

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ncome-tax (Appeals). It was also her submission that the assessee by way of a specific ground has stated that she is not a doctor and the explanation offered before the Assessing Officer has been repeated and without discussing the issues the Commissioner of Income-tax (Appeals) has confirmed the penalty order. It was submitted that all along the assessee right from before the Assessing Officer has pleaded that the assessee is an unqualified person who has opened an X-ray-cum-pathological labora .....

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upon the impugned order. 7. We have heard the rival submissions and perused the material available on record. The assessee in the facts of the present case admittedly was running an X-ray cum-pathological laboratory with the help of technicians and is not holding the qualification of a doctor. Since the accounts were not audited, penalty under section 271B has been imposed and confirmed leading to the filing of the present appeal. We find from the record that before the Commissioner of Income-ta .....

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tax (Appeals) who has mechanically confirmed the penalty order. Section 271B of the Act which has been invoked by the Revenue reads as under : "271B. Failure to get accounts audited.-If any person fails, to get his accounts audited in respect of any previous year or years relevant to an assessment year or furnish a report of such audit as required under section 44AB, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum equal to one-half per cent. of the tota .....

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ceipts, as the case may be, in business exceed or exceeds one crore rupees in any previous year ; or (b) Carrying on profession shall, if his gross receipts in profession exceed twenty-five lakh rupees in any previous year ;" . . . (emphasis provided) 9. The relevant provision has been extracted above which clearly shows that for a person who is "carrying on a business" the limits set in sub- clause (a) of section 44AB would kick in at Rs. one crore and for a person who is "c .....

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arly, a person carrying on a profession was required to get his accounts audited if the total sales/turnover or gross receipts in the previous year exceeds ₹ 25 lakhs. 10. We find from the record that consistently the assessee has contended that she was not a professionally qualified person as she has no medical professional qualification and the specific pathological lab was being run with the help of technicians. The said submission is found extracted in page 4 of the impugned order and .....

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