SUDIPTA SADHUKHAN,HOOGHLY vs. ACIT, CIRCLE-23(1), HOOGHLY, HOOGHLY

PDF · subscribers
ITA 573/KOL/2022Status: HeardITAT Kolkata21 April 2023AY 2017-20183 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee was not liable for audit under Section 44AB as their turnover did not exceed Rs. 2 crores and they had declared profits in accordance with Section 44AD(1). Therefore, the penalty was deleted.

What were the facts?

The assessee's turnover was Rs. 1,61,43,600/-, which was enhanced by the AO. The AO imposed a penalty under Section 44AB for not getting accounts audited, which was upheld by the CIT(A).

What were the issues?

Whether the assessee was liable for mandatory audit under Section 44AB when their turnover was below Rs. 2 crores and profits were declared under Section 44AD(1). Whether the penalty under Section 271B was rightly imposed.

Which sections of the Income-tax Act were involved?

Section 44AB,Section 44AD(1),Section 271B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH: KOLKATA

Before: Shri Rajesh Kumar & Shri Sonjoy Sarma]

Per Rajesh Kumar, AM:

1.

This is the appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax(Appeals) –NFAC, Delhi (hereinafter referred to as the Ld. CIT(A)”] dated 19.08.2022 for the AY 2017-18.

2 Assessment Year: 2017-18 Sudipta Sadhukhan 2. The only issue raised by the assessee is against the confirmation of penalty of Rs. 1,50,000/- by Ld. CIT(A) as imposed by the AO u/s 271B of the Act by ignoring the fact that the assesse is not liable to audit u/s 44AB of the Act.

3.

Facts in brief are that the assessee’s total turnover during the year was Rs. 1,61,43,600/- which was enhanced by the AO to Rs. 3,38,47,120/-. During the assessment proceedings, the AO imposed a penalty on the assessee u/s 44AB of Rs. 1,50,000/- whereas as a matter of fact the assessee has filed return by offering higher profit/income than as provided u/s 44AB of the Act . The AO however did not accept the contentions of the assessee and imposed penalty.

3. The Ld. CIT(A) also affirmed the same.

4.

After hearing rival contention and perusing the material on record particularly the provisions of Section 44AB of the Act which provides for the requirement of getting the accounts audited in certain cases by certain persons carrying on business or profession. Further section 44AB(a) of the Act provides that in case of a person carrying on business , if the total sales/ gross receipts as the case may be from the business exceed Rs. 1.00 crore in any previous year, then the person has to get the accounts audited .We also perused the proviso which has been introduced by Finance Act, 2017 w.e.f 01.04.2017 which provides that this section shall not apply to a person who has declared profit and gain in the previous year in accordance with provisions of Section 44AD(1) of the Act and his total sale/ turnover/ gross receipt of the said person does not exceed Rs. 2.00 crores in such previous year meaning thereby that if turnover of the assessee does not exceed Rs. 2.00 crores and he declares profit and gain in the previous year in accordance with provisions of Section 44AD(1) of the Act , then the provisions of Section 44AB of the Act are not applicable to that person. This is undisputed fact that the turnover of the assessee does not exceed two crores and the profit declared are in terms of provisions of Section 44AD(1) of the Act and therefore the assessee is not required to get the accounts audited u/s 44AB of the Act. Accordingly we set aside the order of Ld. CIT(A) and direct the AO to delete the penalty u/s 271B of the Act.

Order is pronounced in the open court on 21st April, 2023

More judgments on Section 44AB

All 2,486 judgments and leading authorities on Section 44AB →

Recent GST High Court judgments

Search GST case law →