MURUGESAN SANTHI,CHENNAI vs. ITO, CHE-C-(141)(1), CHENNAI

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ITA 585/CHNY/2023Status: DisposedITAT Chennai31 August 2023AY 2019-202 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the assessee did not provide any reasonable cause for the violation. However, to uphold natural justice, the appeal was restored to the CIT(A) for a fresh adjudication, with a direction for the assessee to substantiate their case.

What were the facts?

The assessee failed to get their accounts audited under Section 44AB despite having a turnover of Rs. 300.76 Lacs. This led to a penalty under Section 271B being levied by the AO and upheld by the CIT(A).

What were the issues?

Whether the penalty under Section 271B was rightly imposed for failure to comply with Section 44AB, and if the assessee had any reasonable cause for such failure.

Which sections of the Income-tax Act were involved?

Section 44AB,Section 271B,Section 273B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, CHENNAI

Before: HON’BLE SHRI MAHAVIR SINGH, VP & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2019-20 arises out of the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [CIT(A)] dated 15-03- 2023 confirming penalty u/s 271B for Rs.1.50 Lacs. The impugned penalty has been levied by Ld. AO vide order dated 24-01-2022. At the time of hearing, none appeared for assessee. The Ld. Sr. DR submitted that penalty was mandatory in nature and therefore, the impugned order may be confirmed. Having considered material on record, the appeal is disposed-off as under.

2.

The impugned penalty stem from the facts that the assessee being resident individual filed return of income on 19-03-2020 declaring income of Rs.14.01 Lacs. Since the turnover was Rs.300.76 Lacs, the assessee was required to get his accounts audited u/s 44AB. The assessee failed to do so and accordingly, the impugned penalty was triggered and levied against the assessee. The Ld. CIT(A) upheld the same against which the assessee is in further appeal before us.

3.

We find that the assessee has failed to adduce any reasonable cause u/s 273B for violation of provisions of Sec.44AB. However, keeping in mind the principle of natural justice, we deem it fit to grant another opportunity of hearing to the assessee to substantiate its stand. Accordingly the appeal is restored back to the file of ld. CT(A) for fresh adjudication with a direction to the assessee to substantiate its case.

4.

The appeal stand allowed for statistical purposes. Order pronounced on 31st August, 2023.

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