TMI Blog2023 (5) TMI 704X X X X Extracts X X X X X X X X Extracts X X X X ..... to get the books of account audited. - Decision in the case of BHARAT CONSTRUCTION COMPANY VERSUS INCOME TAX OFFICER [ 1998 (12) TMI 614 - MADHYA PRADESH HIGH COURT] followed. Since, the case in hand, the assessee did not get his books of account audited, therefore, as per the provisions of section 44AB read with section 271B AO rightly levied the penalty u/s 271B of the Act. We, therefore, do not find any merit in the appeal of the assessee and the same is accordingly dismissed. - I.T.A. No. 72/Ran/2022 - - - Dated:- 15-5-2023 - Shri Sanjay Garg, Judicial Member And Shri Rajesh Kumar, Accountant Member For the Appellant : Shri P. S. Paul, AR For the Respondent : Shri Pranob Kumar Koley, Sr. DR ORDER PER SANJAY GARG, JUDICIAL MEMBER: The present appeal has been preferred by the assessee against the order dated 27.06.2022 of the National Faceless Appeal Centre [hereinafter referred to as CIT(A) ] passed u/s 250 of the Income Tax Act (hereinafter referred to as the Act ). 2. As per the statement of facts furnished by the assessee, the assessee has been running the business of imparting tuition classes. The assessment was made for the year under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er profession as is notified 4 by the Board in the Official Gazette shall keep and maintain such books of account and other documents as may enable the 5 [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 6 [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 7 [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 8 [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 9 [ten lakh] rupees, 10[during such previous year; or (iii) where the profits and gains from the business are deemed to be the profits and gains of the assessee under 11 [section 44AE] 12 [or section 44BB or section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s from the business are deemed to be the profits and gains of such person under section 44AE or section 44BB or section 44BBB, as the case may be, and he has claimed his income to be lower than the profits or gains so deemed to be the profits and gains of his business, as the case may be, in any previous year; or (d) carrying on the profession shall, if the profits and gains from the profession are deemed to be the profits and gains of such person under section 44ADA and he has claimed such income to be lower than the profits and gains so deemed to be the profits and gains of his profession and his income exceeds the maximum amount which is not chargeable to income-tax in any previous year; or (e) carrying on the business shall, if the provisions of sub-section (4) of section 44AD are applicable in his case and his income exceeds the maximum amount which is not chargeable to income-tax in any previous year, get his accounts of such previous year audited by an accountant before the specified date and furnish by that date the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if their annual receipt/turnover exceeds the prescribed limit. However u/s 44AB, the auditing of books has been made mandatory only in case of persons carrying on business activity only if their turnover increases the prescribed limit, however the prescribed limit for business is different than that for person carrying on profession. Further the limit prescribed u/s 44AA relating to annual receipts/turnover is very less as compared to that u/s 44AB of the Act. An person covered u/s 44AB is of course also covered u/s 44AA of the Act but not the vice-versa may not be true. The penalty u/s 271A is levied for non-compliance of the provisions of section 44AA of the Act, whereas, the penalty u/s 271B is levied for non-compliance of the provisions of section 44AB of the Act. Neither section 44AA and 44AB are in substitution of each other and nor the penalty levied u/s 271A and 271AB are in alternate or in substitution to each other. The separate and distinct provisions of section 44AA and 44AB of the Act not only apply on different class of persons but also on the different threshold of income/sales turnover. It is to be further noted here that the rate of penalty u/s 271A for non-mainte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... books, thereafter the Assessing Officer issued another notice for levy of penalty u/s 271B of the Act for not getting the books of accounts audited. The assessee challenged the levy of penalty u/s 271B of the Act on the ground that the same was barred by limitation. The Hon ble Madhya Pradesh High Court has held that the defaults contemplated by section 271A and section 271B are separate and distinct. Under the latter provision, if the assessee fails to get his accounts audited u/s 44AB, he is liable to penalty. The object is to get a clear picture of the assessee s accounts whose turnover exceeds the prescribed limit. The rates envisaging two types of defaults are also different. The Hon ble High Court also took notice the fact that earlier penalty levied by the Assessing Officer only for non-maintenance of accounts by the assessee and not for its failure to have its accounts audited u/s 44AB of the Act. Therefore, the Hon ble High Court held that the earlier penalty levied by the Assessing Officer u/s 271A of the Act was only for non-maintenance of books of account and the same did not cover the penalty for not getting the books audited u/s 271B of the Act and that the second no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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