MOHD ASLAM,ALLAHABAD vs. ITO-1(3), ALLAHABAD

This is an appeal preferred by the assessee against the order of the Ld. CIT(A)/NFAC, Delhi dated 18.01.2023 for AY. 2013-14 wherein the Ld. CIT(A) has confirmed the penalty order of the AO imposing the penalty u/s 271B of the Income Tax Act, 1961 (hereinafter “the Act”) to the tune of Rs.55,660/-.

At the outset, the Ld. AR of the assessee brought to my notice that the impugned order of the Ld. CIT(A) is an ex-parte order. And the Ld. CIT(A), taking note that the assessee did not file any response to the notices issued, dismissed the appeal ex-parte qua assesse. Further, it has been brought to my notice that in the assessee’s case assessment u/s 143(3) of the Act was completed on 17.02.2016 inter- alia making certain additions. The Ld. CIT(A) noted that the assessee’s actual business receipt was to the tune of Rs.1,11,51,920/- whereas the assessee had shown in his books only Rs.27,29,000/-.

I have heard both the parties and perused the records. It is noted that the AO while framing the assessment u/s 143(3) of the Act on 17.02.2016 noted that the assessee’s turnover was more than Rs. 1 crore (Rs.1,11,51,920/-) and since assessee did not file audit report u/s 44AB of the Act, he has levied penalty u/s 271B of the Act of Rs.55,660/-. According to the Ld. AR, the AO erred in taking note that the assessee’s trading receipt was more than of Rs.1 crore i.e. (Rs.1,11,51,920/-) whereas according to him, the AO did not appreciate the fact brought to his notice that Rs.13,82,000/- (amount received in instalment) was sale consideration of assessee’s truck to one Shri Narendra Prasad Shukla on 01.10.2012. In order to support the aforesaid contention the assessee had filed Form-23 (Certificate of registration from Transport Department of Uttar Pradesh) regarding his Truck no. UP70-BT-3727 and contended that he has sold it to Shri Nagendra Prasad Shukla in the year under consideration and have received sale consideration in instalments totalling Rs.13,82,000/- Mohd. Aslam which was deposited in his account. Thus, according to assesse, this amount cannot be part of trading/business receipt and if this amount is subtracted, then assessee’s trading receipt will be less than Rs.1 crore, and in such an event, no penalty is leviable u/s 271B of the Act. However, since the documents furnished before this Tribunal as noted (supra) to support the aforesaid claim is not legible, for the interest of justice and fair play, I am inclined to set aside the impugned order of the Ld. CIT(A) and restore the matter back to the file of the AO for verification of the documents regarding assessee’s claim of sale of truck on 01.10.2012 for Rs.13,82,000/- to Nagendra Prasad Shukla. And thereafter, AO to decide whether the assessee’s turnover would breach the threshold limit of Rs. 1 crore and if the assessee’s claim is found to be correct meaning the assessee’s turnover does not breach Rs.1 crore, then, no penalty to be levied. The assessee is directed file relevant documents/written submission and request for hearing, if he desires, in accordance to law and AO to decide the issue/penalty in accordance to law.