ABDUL VAHEED KHAN, RAIPUR,RAIPUR vs. INCOME TAX OFFICER, WARD 1(2), RAIPUR, RAIPUR

At the time of hearing, none appeared for the assessee nor any adjournment petition has been filed. The matter is heard after recording the submissions of the Ld. Sr. DR and on a careful perusal of the materials available on record.

At the very outset, it is noted that the appeal is time barred by 357 days. Explaining reason for the said delay, condonation petition filed by the assessee states that the documents were furnished to the Ld. Counsel and they got misplaced, which therefore, cannot be attributed to any mis- conduct on the part of the assesse.

The Ld. Sr. DR fairly conceded that merits may be considered in the matter.

Considering the aforesaid facts and circumtances, I do not find any malafide intention on the part of the assessee for the said delay and following judicial pronouncements viz. (i) Collector, Land Acquisition Vs.

This case pertains to the levy of penalty u/s. 271B of the Income Tax Act, 1961 (for short ‘the Act’) for not getting books of accounts audited u/s. 44AB of the Act. In the proceedings before the first appellate authority, it was contended by the assessee that the Tribunal had set- aside the quantum appeal to the office of the Ld. CIT(Appeals)/NFAC and since the same is not yet adjudicated, therefore, the present appeal pertained to the levy of penalty u/s.271B of the Act may be kept in abeyance. However, this contention was not accepted by the Ld. CIT(Appeals)/NFAC on the ground that since threshold limit of turnover of the present assessee exceeds as prescribed u/s.44AB of the Act since gross receipt was at Rs.3,37,25,138/-, therefore, he held that such levy of

The Ld. CIT(Appeals)/NFAC had upheld the penalty u/s. 271B of the Act just on the ground that it exceeds threshold limit for getting books of account audited u/s.44AB of the Act. However, the fact of the matter remains that quantum appeal is pending also before the First Appellate Authority as per facts emanating in the order of the Ld. CIT(Appeals)/NFAC. Further, on perusal of Section 44AB of the Act, there are several ‘clause’ and ‘proviso’ which needs to be interpreted while adjudicating the quantum appeal and only thereafter, it can be decided whether penalty u/s. 271B of the Act is applicable or not. It is a matter of common knowledge that penalty provisions are not automatic and they are separate proceedings. In the interest of substantive justice, therefore, the provisions of Section 44AB of the Act itself needs to be determined in terms with gross receipts of the assessee and all other incidental transactions and thereafter, the correct receipt of transactions shall emanate. This will be determined when the First Appellate Authority determines the quantum appeal. Accordingly, I set-aside the order of the Ld. CIT(Appeals)/NFAC and remand the matter back to its file for denovo adjudication as per law in this penalty appeal after considering outcome of the quantum appeal and interpretation of the contents of Section 44AB of

That as per above terms, appeal of the assessee is allowed for statistical purposes. Order pronounced in open court on 9th day of July, 2026.