TMI Blog2020 (1) TMI 865X X X X Extracts X X X X X X X X Extracts X X X X ..... wing the earlier decision of this Tribunal, the penalty levied U/s 271B of the Act is deleted. - Decided in favour of assessee. - ITA No.09/Ind/2018 - - - Dated:- 21-1-2020 - Shri Kul Bharat, Judicial Member And Shri Manish Borad, Accountant Member For the Appellant : Shri Ashish Jain, CA For the Revenue : Shri V.J. Boricha Sr., DR ORDER PER MANISH BORAD, AM. The above captioned appeal filed at the instance of assessee is pertaining to assessment year 2009-10 is directed against the orders of Ld. Commissioner of Income Tax (Appeals) (in short Ld.CIT ], Ujjain, dated 11.10.2017 which is arising out of the order u/s 271B of the Income Tax Act 1961(In short the Act ) dated 30.01.2017 framed by ITO-Mandsaur. 2. Brief facts is culled out from the records are that the assessee is an individual engaged in the business. Income of ₹ 2,97,870/- declared in the return of income filed on 03.04.2013 and assessment u/s 143(3) r.w.s. 148 of the Act was completed on 28.07.2016, determining total income at ₹ 6,26,617/-. During the course of assessment proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t order u/s 143(3), therefore, the appellant could not understood and remained under bonafide belief that his gross receipts after rectification of From No.26AS will not be more than ₹ 40 lakhs and he may not be liable for audit u/s 44AB. 1.3 The main purpose of audit u/s 44AB is to assist the Ld. Assessing Officer in assessment proceedings u/s 143(3) etc. But nowhere in the assessment order, the Ld. Assessing Officer mentioned that he got any difficulty in doing assessment in absence of audit report. Rather he simply replaced the net profit rate of 8% by 11.50% and completed the assessment. He merely mentioned the reason for levying the penalty that the audit report is a legal requirement which is not complied with. Thus the default of non audit is merely technical and venial and the revenue has not suffered any loss. In such cases penalty may not be sustained (Judicial decisions relied upon mentioned in CIT(A) s order). 4. At the outset, Ld. counsel for the assessee submitted that the issues raised on merits against the levy of penalty u/s 271B of the Act is squarely covered in favour of the assessee by the decision o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore us. The sole grievance of the assessee relates to levy of penalty u/s 271B of the Act at ₹ 35,830/-. The undisputed facts remains that in the return of income, assessee has disclosed turnover of ₹ 21,66,292/-. The assessee also disclosed commission income @1% of the turnover of ₹ 49,48,900/- being a transactions of cash deposited and withdrawal relating to purchase of clothes for hawkars/Feriwalas. The assessee claim was denied by the Ld. AO and the alleged amount of ₹ 49,48,900/- was treated as unexplained turnover. 11. In these given facts where the assessee was in a bona fide belief of treating the commission income as turnover along with other turnover accounted in the books of accounts during the year which was below of limit u/s 44AB of the Act, but Ld. AO treated unaccounted turnover as part of total turnover and holding the assessee liable for paying penalty u/s 271B of the Act for not getting books of account audited, we find that the issue stands spuarely covered in favour of the assessee by the decision of the Coordinate Bench, Jaipur in the case of Shri Satya Prakash Mundra vs. ITO vide ITANo.754/JP/2016 dated 23.01.2019. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee has violated the mandatory condition of his books of account to be audited. The penalty U/s 271B of the Act has been levied by the Assessing Officer due to the reason that there was an addition on account of unaccounted sale. Thus, it is clear that at the time of preparing the books of account, the turnover of the assessee was only ₹ 24,80,995/- and consequently it was not necessary to get the books of account audited as required U/s 44AB of the Act. The A.O. has made the addition based on the survey conducted in the case of one Shri P.C. Vijayvargiya, however, no corresponding material in the possession of the assessee was found by the Assessing Officer to show that at the time of preparing the books of account, the assessee's turnover was exceeding the limit of ₹ 60.00 lacs as provided U/s 44AB of the Act. Hence, the requirement of audit of the books of account as per Section 44AB of the Act is only in the case when the assessee on its own declared the turnover of more than the minimum amount prescribed U/s 44AB of the Act. The Coordinate Bench of this Tribunal in the case of Nirmal Kumar Joshi Anr. Vs ITO (Supra) while considering the identical issue has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion that the assessee has failed to get offered his books of accounted, that in a such a scenario, the contention of the Revenue could have been accepted. Further, what has been referred in section 44AB is the books of accounts maintained in the regular course of business and where an admission is made by the assessee based on third party statement during the course of survey that the amount found deposited in the bank account belongs to the assessee, it cannot be said that regular books of accounts are maintained even in respect of unaccounted sales or business receipts and the penalty can be levied under section 271B of the Act. In this regard, we refer to the decision of the Coordinate Bench in case of Brij Lai Goyal vs. ACIT (supra) wherein it has been held as under: 11. It is evident from the aforesaid observation that books of account maintained in regular course only make the assessee eligible for grant of immunity from penalty and not with reference to any of such books, which have not been maintained in the regular course of business. Admittedly, the additional sales found as a result of search, was not recorded in the books of accou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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