KARTICK DAS BAIRAGYA ,PURBA BARDHAMAN vs. ITO,WARD1(1)/BWN, BURDWAN

O R D E R

PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:

Kartick Das Bairagya, AY: 2015-16 3. Brief facts of the case are that assessee is in the business of retail dealings in building material on commission basis. Assessee filed his return of income on 14.09.2015, reporting total income of Rs.2,60,678/-. During the course of assessment, Ld. AO noted that assessee has done share transactions through broker Kripa Securities Pvt. Ltd. in which assessee had suffered a loss of Rs.4,38,446/-. Ld. AO noted that assessee entered into intra-day share trading and suffered this loss. Since the income from share trading is below 8% of the total turnover, Ld. AO was of the view that assessee should have got his accounts audited u/s. 44AB of the Act and furnished a report of such audit. Since assessee failed on this count, Ld. AO initiated the proceedings of penalty u/s. 271B of the Act.

3.1. In the course of penalty proceedings, assessee submitted that he was completely unaware of the share dealings done by the broker. Assessee had not done any such share dealings in the past and that he was not informed by the broker for the said share dealings which otherwise would have led the assessee to ascertain the quantum of loss in share dealings and arrive at short term or long term gain or loss on this account. In the course of hearing, assessee collected Form No. 10DB from the broker which showed the loss in the share dealings. It was contended that Ld. AO did not allow sufficient time to get the audit done in respect of the share dealings and furnish a report thereon. Assessee also submitted that in the course of assessment, the income was assessed at Rs.2,74,000/- in respect of income from business as reported in the return filed by the assessee. However, disregarding the submissions made by the assessee, Ld. AO imposed penalty of Rs.1,50,000/- u/s. 271B of the Act. Aggrieved, assessee went in appeal before the Ld. CIT(A), who confirmed the penalty so imposed. Aggrieved, assessee is in appeal before the Tribunal.

Kartick Das Bairagya, AY: 2015-16 4. Before us, Ld. Counsel for the assessee reiterated the submissions made before the authorities below. An affidavit dated 10.02.2023 is also placed on record deposing the facts and circumstances of the case which led to the failure on the part of the assessee to get the accounts audited and furnish a report of such audit. Ld. Counsel further submitted that delay in preparing the audit report occurred since impugned year is the first year where the turnover of the assessee exceeded Rs. 1 Cr. on share dealings for which the assessee was not aware of, to get the accounts audited u/s. 44AB of the Act. Assessee got the accounts audited u/s. 44AB and obtained the audit report for the same.Ld. Counsel emphasized that assessee was under this bona fide belief owing to the fact that turnover in share dealings had exceeded Rs. 1 Cr. for the first time and would be subjected to audit, failure of which would lead to penalty u/s. 271B of the Act. Ld. Counsel submitted that assessee is eligible to the protection provided in sec. 273B of the Act since he was under a bona fide belief that provisions of sec. 44AB were not applicable to him. According to him, explanation offered by the assessee constitutes reasonable cause as there was no wilful default on the part of the assessee.