TMI Blog2023 (9) TMI 671X X X X Extracts X X X X X X X X Extracts X X X X ..... s of sub-clause (a) to Section 44AB of the Act, the assessee is out of the ambit of mandatory requirement of audit u/s. 44AB of the Act. Therefore, the question of imposing penalty u/s. 271B of the Act for not getting the accounts audited u/s. 44AB of the Act, does not arise in the present case. Appeal of assessee allowed. - SHRI RAVISH SOOD, JM SHRI ARUN KHODPIA, AM For the Appellant : Shri Nilesh Jain, CA For the Respondent : Shri Choudhary N.C. Roy, Sr. DR ORDER Per Arun Khodpia, AM : The present appeal by the assessee is directed against the order passed by the CIT(A), National Faceless Appeal Centre (NFAC), Delhi, dated 18.04.2022 u/s. 250 of the Income Tax Act, 1961 (in short the Act ) against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t before the specified date, irrespective of annual turnover or capital, and furnish by that date the report of such audit in the prescribed form duly signed and verified by such accountant as per the provisions of section 44AB of the Act, However, during the course of assessment proceedings, it was revealed that the assessee company failed to do so. Resultantly, the penalty proceeding u/s. 271B of the Act was imposed on the assessee. Before imposing the penalty, a show cause notice was issued on the assessee and in response to which the assessee responded by filing a written submission on 14.06.2018. According to the written submission of the assessee that the turnover or revenue during the relevant previous year was much less than the lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act, every person, carrying on business shall, if his/its total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds rupees sixty lakhs in any previous year (rupees 60 lakhs was the limit fixed by the Finance Act, 2012 effective from 1 st April, 2013, therefore, applicable for the relevant assessment year i.e. AY. 2013-2014). It was the submission of the ld. AR that the assessee was liable to get its accounts audited under the provisions of the Companies Act. However, since the turnover of the assessee company was below Rs. 60 lakhs i.e. Rs. 12,31,223/-, it was not mandatory for the assessee company to get its accounts audited under the provisions of Section 44AB of the Income Tax Act, 1961 also and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... audit report by the specified date. The observation of the ld. AO pointed, having emphasis on the words, irrespective of annual turnover or capital , but has not noticed the sentence after these words, under their respective laws , thereby has concluded that such audit was mandatory within the provisions of Section 44AB of the Act. Provisions of sub-clause (a) to Section 44AB of the Act are reproduced hereunder for ready reference :- Audit of accounts of certain persons carrying on business or profession. 44AB. Every person, (a) carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds one crore rupees in any previous year 89 [***]: 90 [Provided that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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