TMI Blog2019 (12) TMI 201X X X X Extracts X X X X X X X X Extracts X X X X ..... is income by suppressing the gross receipts and hence, worked out the penalty on the amount of tax sought to be evaded u/s 271(1)(c) - additions on which the penalty was imposed was estimated after applying the net profit rate and that it was a settled law that penalty on ad hoc disallowance or addition made on estimate basis was not attracted - HELD THAT:- The Hon ble Delhi High Court in CIT vs. Aero Traders Pvt. Ltd. [ 2010 (1) TMI 32 - DELHI HIGH COURT] has held that no penalty u/s 271(1)(c) can be imposed when income is determined on estimate basis. Similar view has been taken in the case of Harigopal Singh vs. CIT [ 2002 (8) TMI 65 - PUNJAB AND HARYANA HIGH COURT] and CIT vs. Subhash Trading Company [ 1995 (11) TMI 37 - GUJARAT HIGH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unts audited as required u/s 44AB of the Act. 2.1 The AO, accordingly, issued penalty notice u/s 271B on 24/12/2012. Against the said notice, the assessee submitted that the assessee is running a Kirana General Stores and he is filing return of income in which showing business income u/s 44AF on the basis of presumption and not maintaining books of account. During the scrutiny proceedings, the department made addition of turnover on estimate basis, which could be real turnover or not, for which the assessee agreed and paid tax due on the income resulting on the basis of estimation of turnover. He, therefore, submitted that the audit cannot be made applicable on the basis of estimated turnover. For this proposition, he relie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n provided for non maintenance of accounts, i.e. under section 271A of the Act and for not getting the accounts audited and not furnishing the audit report, i.e. under section 271B. If a person has not maintained account books or any accounts the question of audit does not arise. In such an event the imposition of penalty under the provision contained in section 271A for alleged non-compliance with section 44AA may arise but the provisions of section 44AB do not get violated in a case where accounts have not been maintained at all and therefore the penal provisions of section 271B of the Act would not apply. 5.1 In the instant case, when the books of account are not maintained, the AO did not initiate any proceedings for not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the CIT(A) upheld the penalty levied by the AO u/s 271(1)(c). 10. Considered the rival submissions and perused the material on record. In the instant case, the additions on which the penalty was imposed was estimated after applying the net profit rate and that it was a settled law that penalty on ad hoc disallowance or addition made on estimate basis was not attracted. The Hon ble Delhi High Court in CIT vs. Aero Traders Pvt. Ltd., reported in 322 ITR 316 (Del), has held that no penalty u/s 271(1)(c) can be imposed when income is determined on estimate basis. Similar view has been taken by the Hon ble Punjab Haryana High Court in the case of Harigopal Singh vs. CIT reported in 258 ITR 85 (P H) and the Hon ble Gujarat High ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
