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Income Tax Appellate Tribunal, “DB” BENCH, KOLKATA
Before: SHRI RAJPAL YADAV, VP & SHRI DR. MANISH BORAD, AM
These appeals at the instance of the assessee are directed against the orders of Commissioner of Income-tax (Appeals), Patna-3, [learned CIT(A)] even dated 26.05.2023. The penalties were levied by DCIT/ ACIT Circle-1, Patna under section 271A of the Act vide orders dated 21st March, 2022.
The sole and common issue raised in this bunch of appeals is against the levy of penalty of ₹25,000/- u/s 271A of the Act for the impugned assessment years. When the case was
As the common issue raised in all these appeals are against the levy of penalty under Section 271A of the Income-tax Act, 1961 (the Act), we for the purpose of adjudication taken up the facts of for A.Y. 2014- 15 and our decision shall apply mutatis mutandis to all the remaining captioned appeals.
The learned Departmental Representative vehemently argued supporting he orders of the learned lower authorities and submitted that the penalty levied may be affirmed.
We have heard and perused the records available on record. We observe that the assessee is a individual and running a business as sole proprietor of M/s Neha Kil Bhandar. Facts remain undisputed that the assessee has furnished the return, declaring income under presumptive taxation scheme i.e. Section 44AD of the Act and has declared income of ₹7,53,982/- on the gross turnover of ₹35,37,418/-. We also noticed that the net profit rate declared by the assessee is approx. 21.31 %, which is much higher than the minimum net profit rate required to be offered by the assessee for falling under the Provisions of Section 44AD of the Act. We also observe that the income
In the instant case, the learned CIT (A) has affirmed the action of the learned Assessing Officer of brining the assessee under sub section 5 of Section 44AD of the Act and since sec 44AD of the Act has direct bearing on the issue raised before us the same is reproduced below: - “44AD. [ Special provision for computing profits and gains of business on presumptive basis. [ Substituted by Act 33 of 2009, Section 20 (w.e.f. 1.4.2011).] (1) Notwithstanding anything to the contrary contained in sections 28 to 43-C, in the case of an eligible assessee engaged in an eligible business, a sum equal to eight per cent. of the total turnover or gross receipts of the assessee in the previous year on account of such business or, as the case may be, a sum higher than the aforesaid sum claimed to have been earned by the eligible assessee, shall be deemed to be the profits and gains of such business chargeable to tax under the head "Profits and gains of business or profession".
(2) Any deduction allowable under the provisions of sections 30 to 38 shall, for the purposes of sub-section (1), be deemed to have been already given full effect to and no further deduction under those sections shall be allowed:Provided that where the eligible assessee is a firm, the salary and interest paid to its partners shall be deducted from the income (3) The written down value of any asset of an eligible business shall be deemed to have been calculated as if the eligible assessee had claimed and had been actually allowed the deduction in respect of the depreciation for each of the relevant assessment years.
(4) The provisions of Chapter XVII-C shall not apply to an eligible assessee in so far as they relate to the eligible business.
(5) Notwithstanding anything contained in the foregoing provisions of this section, an eligible assessee who claims that his profits and gains from the eligible business are lower than the profits and gains specified in sub-section (1) and whose total income exceeds the maximum amount which is not chargeable to income-tax, shall be required to keep and maintain such books of account and other documents as required under sub-section (2) of section 44-AA and get them audited and furnish a report of such audit as required under section 44-AB.Explanation. - For the purposes of this section,- (a)"eligible assessee" means, -(i)an individual, Hindu undivided family or a partnership firm, who is a resident, but not a limited liability partnership firm as defined under clause (n) of sub-section (1) of section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009); and (ii)who has not claimed deduction under any of the sections 10-A, 10- AA, 10-B, 10-BA or deduction under any provisions of Chapter VI-A under the heading "C.-Deductions in respect of certain incomes" in the relevant assessment year; (b)"eligible business" means, -(i)any business except the business of plying, hiring or leasing goods carriages referred to in section 44-AE; and
As far as remaining appeal in to 237/PAT/2023 for A.Y. 2015-16 to 2019-20 are concerned, since the issue raised and facts are verbatim similar, except the change in figures and this fact being not controverted by the learned Departmental Representative, we apply our decision of mutatis mutandis on the remaining appeals in ITA nos. 233 to 237/PAT/2023 for A.Y. 2015-16 to 2019-20 and delete the impugned penalties levied under
In the result, all the appeals of assessee in to 237/PAT/2023 are allowed.
Order pronounced in the open court on 13.09.2024.