TMI Blog2020 (2) TMI 982X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee during the year did not exceed the threshold limit, therefore, Section 44AD of the Act cannot be invoked. This contention of the assessee is also not acceptable because the assessee has different type of registers which were discovered during the course of search and seizure proceedings. According to the registers the assessee is giving services of medical treatment and charging fee for the services/treatment given to the patients. Therefore, it cannot be denied that the assessee was not engaged in the medical profession which covers u/s.44AA. During the course of assessment proceedings, the assessee could not produce any accounts which were required to be maintained by the assessee for earning the impugned income from the operation of nursing home. AO was justified in imposing the penalty u/s.271A for non-maintenance of the books of accounts. No reason to interfere in the order of the CIT(A) in upholding the penalty levied by the AO u/s.271A - Decided against assessee. - ITA Nos. 63 to 68/CTK/2019 - - - Dated:- 18-2-2020 - Shri C.M. Garg, JM And Shri L.P. Sahu, AM For the Assessee : Shri J.M.Pattnaik, Advocate For the Reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unts and he had filed return as per section 44AD of the Income Tax Act, 1961. He further submitted that the assessee is neither a doctor nor possessed any other professional or technical qualification to be engaged in medical profession. After a long discussion in the assessment order by the AO, he computed no taxable income as under :- 12. In view of above discussion, net taxable income and tax payable is computed as under:- Income from salary as per return ----- 2,40,000.00 Income from house property as per return ------ 71,400.00 Income from nursing home as discussed in para-9 above ---- 34,07,293.00 Income from other sources as per return ----- 11,29,873.00 Income from undisclosed bank credits as discussed above ----- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT(A) after considering the submissions of the assessee and findings of AO, upheld the penalty so levied by the AO u/s.271A of the Act for all the assessment years under consideration. 6. Further feeling aggrieved with the order of CIT(A), the assessee is in appeals before the Income Tax Appellate Tribunal. 7. Ld. AR before us submitted that the penalty is not imposable in case of the assessee for the six assessment years as there is no notice u/s.139(9)/139(9)(f) issued by the AO before levying penalty. Ld.AR also filed written submissions which read as under :- That on 03/09/2019, there was a search and seizure u/s. 132 of the I.T. Act both in the residence as well as business premises namely Jena Jena Nursing Home situated in the name of Appellant at Talcher in the District of Anugul. In course of such search operation no books of accounts or any of the documents were impounded except for the AY 2014-2015 to 2016-2017; The assessment was completed based on appraisal report submitted by the Deputy Director of Investigation, Bhubaneswar. After the search, notice u/s.153(A) was issued and ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder of the learned AO as the return was submitted in pursuance of notice u/s.153 (A) of the I.T. Act by disclosing the higher income. The learned CIT (A)' failed to take note of the law that without issuing the statutory notice u/s. 139 (9) of the I.T. Act, the Learned AO is bereft of jurisdiction and authority to impose penalty; In the above back ground and back drop of the matter, the appellant preferred the instant appeal before this Hon'ble Tribunal; among other grounds on the grounds that the decision maker has not understood the law correctly that regulars his decision making power and that the decision of the decision maker is vitiated by illegality and irrationality. BECAUSE, as per section 139 (9) (F) where regular books of accounts are not maintained by the assessee, the returned is accompanied by a statement indicating the amounts of turn over or as the case may be, gross receipts, gross profits, expenses and net profit or business or profession on the basis of which such amount has been computed and also disclosing the amount of to5tal sundry creditors stock in trade and cash balance as at the end of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld the action of AO observing that the assessee could not file any reasonable cause for non-maintenance of books of accounts. However, as per the provisions of Section 271A of the Act, If any person fails to keep and maintain any such books of account and other documents as required by section 44AA of the Act or the rules made thereunder, in respect of any previous year or to retain such books of account and other documents for the period specified in the said rules, the Assessing Officer or the Commissioner (Appeals) may direct that such person shall pay, by way of penalty a sum of twenty-five thousand rupees. The relevant provisions of Section 271A of the Act read as under :- Failure to keep, maintain or retain books of account, documents, etc 271A. Without prejudice to the provisions of [section 270A or] section 271, if any person fails to keep and maintain any such books of account and other documents as required by section 44AA or the rules made thereunder, in respect of any previous year or to retain such books of account and other documents for the period specified in the said rules, the [Assessing] Officer or the [Commissioner (Appeals)] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... untancy or technical consultancy or interior decoration or any other profession as is notified by the Board in the Official Gazette 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 this Act. (2) Every person carrying on business or profession [not being a profession referred to in sub-section (1)] shall,- (i) if his income from business or profession exceeds one lakh twenty thousand rupees or his total sales, turnover or gross receipts, as the case may be, in business or profession exceed or exceeds ten lakh rupees in any one of the three years immediately preceding the previous year; or (ii) where the business or profession is newly set up in any previous year, if his income from business or profession is likely to exceed one lakh twenty thousand rupees or his total sales, turnover or gross receipts, as the case may be, in business or profession are or is likely to exceed ten lakh rupees, during such previous year; or (iii) where the profits and gains from the business are deemed to be the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (vi) a local authority, and (vii) every artificial juridical person, not falling within any of the preceding sub-clauses; 13. From the facts and findings recorded by the AO, it is clear that the assessee was engaged in the medical profession for earning her income as calculated by the AO on the basis of documents available before him. The main source of income of the assessee is from the consultancy/services from the treatment of patients which was being given by the doctors/professionals/technicians etc. The predominant source of income was from medical profession. During the course of search and seizure operation various incriminating documents were found. The relevant portion from the assessment order is as under :- 5. In the return of income for this year, assessee has disclosed gross receipts of ₹ 40,04,880/-. She has disclosed profit of ₹ 5,11,708/- on such receipts u/s 44AD of the Act. Before discussing the eligibility of expenses claimed, the issue of gross receipts needs to be discussed in relation to findings in the course of search at her premises. During the course of search, several registers and doc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground No.1 is not acceptable because the AO has not accepted the returned income of the assessee while calculating taxable income of the assessee. Therefore, no need to issue defect notice by the AO u/s.139(9)(f) of the Act before initiating penalty u/s.271A of the Act. With regard to ground No.2 the contention of the assessee is that as the turnover of the assessee during the year did not exceed the threshold limit, therefore, Section 44AD of the Act cannot be invoked. This contention of the assessee is also not acceptable because the assessee has different type of registers which were discovered during the course of search and seizure proceedings. According to the registers the assessee is giving services of medical treatment and charging fee for the services/treatment given to the patients. Therefore, it cannot be denied that the assessee was not engaged in the medical profession which covers u/s.44AA of the Act as stated above. During the course of assessment proceedings, the assessee could not produce any accounts which were required to be maintained by the assessee for earning the impugned income from the operation of nursing home. Therefore, the AO was justified in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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