BRIGHT IMPEX AND AGENCIES PVT. LTD,KOLKATA vs. ITO, WARD 10(2),, KOLKATA

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ITA 2579/KOL/2025Status: DisposedITAT Kolkata29 May 2026AY 2021-225 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee's turnover did not exceed the enhanced threshold for mandatory tax audit under Section 44AB, especially considering the amendments regarding cash transactions. Therefore, the penalty imposed under Section 271B was not sustainable.

What were the facts?

The assessee, a registered NBFC, had a turnover of Rs. 1,20,06,326 for AY 2021-22. Penalty proceedings were initiated under Section 271B for not getting its books audited as required by Section 44AB. The assessee argued that the enhanced turnover threshold for tax audit applied due to negligible cash transactions.

What were the issues?

Whether the penalty under Section 271B for failure to get books audited is leviable when the assessee's turnover falls below the enhanced threshold due to negligible cash transactions, as per amended Section 44AB.

Which sections of the Income-tax Act were involved?

Section 271B,Section 44AB,Section 139,Section 143(1),Section 143(3)

AI-generated summary — verify with the full judgment below

Before: ShriRajesh Kumar & ShriPradip Kumar Choubey

IN THE INCOMETAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA Before ShriRajesh Kumar, Accountant Member and ShriPradip Kumar Choubey, Judicial Member ITA No.2579/Kol/2025 Assessment Year: 2021-22 Bright Impex and Agencies Pvt. Ltd………………….………………………….Appellant Room No.214, Kamalaya Centre, 156-A Lenin Surani Kolkata- 700013 [PAN No. AABCB3860F] Vs. Commissioner of Income-tax (Appeals)………………..…………….………... Respondent, National Faceless Appeal Centre, (NFAC), Delhi, Delhi,

Appearances by: Shri Yashvardhan Baid, FCA, Advocate, appeared on behalf of the Appellant. Shri, Manoj Kumar Pati, Addl. CIT, Sr. DR ,appeared on behalf of the Respondent. Date of concluding the hearing : May11, 2026 Date of pronouncing the order :May 29 ,2026 ORDER Per Pradip Kumar Choubey, Judicial Member: This appeal filed by the assessee is directed against the order dated 23.09.2025 of the National Faceless Appeal Centre (NFAC) passed under Section 271B of the Assessment Year 2009-10 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”). 2. The brief facts of the case of the assessee is that the assessee, M/s. BRIGHT IMPEX & AGENCIES PRIVATE LIMITED, PAN: AABCB3860F, had filed the return of income for the assessment year 2021-22 u/s 139 of the I.T. Act, 1961 on 28.01,2022 declaring the total income at Rs. NIL and claiming the carry forward of loss of Rs. 16,79,33,868/- The return was processed u/s 143(1) of the Act on 21.03.2022. Subsequently, the case was selected for scrutiny under

ITA No.2579/Kol/2025 Assessment Year- 2021-22 CASS for the reason "Very Low PBDIT ratio in specific business code and turnover range where deficiency is reported in audit report". Notice u/s 143(2) and 142(1) were issued to the assessee as per the provisions of the Act and in response, the assessee had submitted the details called for. The scrutiny assessmentwas completed u/s 143(3) on 21.12.2022 by accepting the returned income atRs. Nil. During the course of assessment proceedings, it was found that the assessee had not got the books of accounts audited and not submitted the report of such audit as required to in view of the provisions contained in section 44AB of the Act. Hence, penalty proceedings u/s 271B were initiated for not getting the books of accounts audited and submitted report of such audit in time.Considering the nature and circumstances of the case, the penalty proceedings-initiated u/s 271B of the IT Act are completed by levying an amount of Rs. 60,031/- (0.5% of the total turnover of Rs. 1,20,06,326) as penalty u/s 271B for not getting the books of accounts audited and failure to submit a copy of such audit report in time as required u/s 44AB.

Aggrieved by the said order assessee preferred appeal before the Cit(A) wherein appeal of the assessee has been dismissed.

Being aggrieved by and dissatisfied the assessee preferred appeal before us.

3.

The Ld. AR challenges the very impugned order thereby submitting that Ld. CIT(A) erred in holding that the assessee’s case did not fall within the enhanced turn over threshold of Rs. 10,00,00,000/-, applicable when cash receipts and payments do not exceed 5% of the total receipts and payments respectively. The Ld. AR submits that cashbook file during the course of proceedings clearly reveals that there was no cash receipts/payment during the year under consideration. The Ld. AR submits that AO as well as the CIT(A) has 2

ITA No.2579/Kol/2025 Assessment Year- 2021-22 duly recorded in their order that the turnover of the assessee for the Assessment Year 2021-22 was Rs.1,20,06,326/- even though he dismiss the appeal of the assessee ignoring the reality that there was no receipts or payment made in cash as the assessee’s had duly submitted the cash book during the penalty proceedings. The Ld. AR submits that order passed by the CIT(A) is against the facts and also against the law.

Contrary to that Ld. DR supports the impugned order.

4.

Upon hearing the submission of the counsel of the respective parties and on perusal of the impugned order, we find that assessee M/s Bright Impex Private Limited as a NBFC, duly registered with RBI. A penalty proceeding u/s 271B of the Act were initiated and during the penalty proceeding the assessee submitted that as per the amendment in Finance Act 2020 and Finance Act 2021, a provision was introduced to Section 44AB of the Act and the threshold limit of turnover for Tax Audit u/s 44was increased from Rs. 1 crore to Rs. 5 crore and Rs 10 crore respectively, if the cash receipts and cash payments were up to Rs. 5% of total receipts and total payments in the given year. The amendment introduced in the Finance Act was effect from 01.04.2021. It is pertinent to mention here that the threshold limit for mandatory Tax Audit stood increased to turnover of Rs. 5 crores and Rs 10 crore provided the cash receipts and payment limits being met. It is a fact that turnover of the assessee for the assessment year 2021-22 was Rs. 1,20,06,326/- and furthermore during the year there was no receipts or payments made in cash as that cash book reflects thus the assessee does not exceed the threshold limit for mandatory Tax Audit u/s 44AB of the act. We find substance in the arguments of the that it is a not a case of violation of Section 271B of the Act.Accordingly, the penalty imposed as bad in law and deleted.

ITA No.2579/Kol/2025 Assessment Year- 2021-22 As a result the appeal of the assessee is hereby allowed.

Kolkata, the 29th May, 2026.

Sd/- Sd/- [Rajesh Kumar] [Pradip Kumar Choubey] Accountant Member Judicial Member Dated:. 29 . 05.2026. DC, PS

Copy of the order forwarded to: 1. Appellant - 2. Respondent - 3. CIT(A)- 4. CIT- 5. CIT(DR)

//True copy// By order Assistant Registrar, Kolkata Benches

ITA No.2579/Kol/2025 Assessment Year- 2021-22

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