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Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI
Before: SHRI VIJAY PAL RAO & SHRI GAGAN GOYALShri Shailesh Jayant Shah vs
ORDER Per Vijay Pal Rao (JM):
This appeal by the assessee is directed against the order dated 08/03/2019 of Commissioner of Income-tax (Appeals arising from the penalty order passed under section 271B of the Income-tax Act for the assessment year 2012-13.
None appeared on behalf of the assessee when this appeal was called for hearing. It transpires from the record that since 28/06/2021, nobody is appearing on behalf of the assessee despite repeated notices issued by registered post with AD. Accordingly, we propose to hear and dispose of this appeal exparte. The assesse has raised the following grounds:-
“1. The Ld AO erred in levying penalty of Rs.1,50,000/- under section 271B of the Income Tax Act 1961. 2. The appellant craves leave to add further grounds or to amend or alter the existing grounds of appeal on or before the date of hearing.”
3. The assesse is an individual and filed his return of income on 30/09/2012 declaring total income of Rs.6,09,630/-. The case was selected for scrutiny under CASS. The Assessing Officer issued notices under section 143(2), 142(1), but there was no compliance on the part of the assessee. The Assessing Officer consequently proceeded to frame the assessment under section 144 being best judgement assessment. The Assessing Officer found that the assessee has shown a turnover of Rs.27,69,32,010/- and net profit of Rs.2,29,142/- only . Since the turnover of the assessee is exceeding the threshold limit as provided under section 44AB, therefore, the books of account of the assessee were liable to be audited under section 44AB. The Assessing Officer has also issued notice to the assessee to furnish the audit report but he assessee failed to respond to the notice. Accordingly, the Assessing Officer has recorded his satisfaction for initiating the penalty proceedings under section 271B of the Act. Thereafter, the Assessing Officer issued a show cause notice dated 27/03/2015 under section 274 r.w.s. 271B of the Act. The assessee did not attend the penalty proceedings or responded to the show cause notice issued by the Assessing Officer. The Assessing Officer then granted one more opportunity to the assessee vide letter dated 27/06/2015, but again neither the assessee attended the proceedings nor any explanation was filed. The Assessing Officer thereafter issued one more notice to the assessee and also called for Inspector’s report about the status of the assessee and serving the notice through affixation. Despite these efforts of the Assessing Officer, when assessee has not responded the Assessing Officer passed penalty order dated 28/09/2015 under section 271B of the Act whereby the penalty of Rs.1,50,000/- was levied. The assessee challenged the levy of penalty before the CIT(A) but could not succeed.
We have gone through the grounds of appeal as raised before the Tribunal as well as before the CIT(A) and noted that the assessee has not uttered a single word to explain the reasons for not getting the books of accounts audited as required under section 44AB of the Income-tax Act. The Ld.DR has relied upon the orders of authorities below and submitted that the assessee has not disputed the turnover of the assessee at Rs.27,69,32,010/- and therefore, as per the provisions of section 44AB, the books of account of the assessee are required to be audited. Failure of the assessee to get the books of account audited attracts the provisions of section 271B. The Assessing Officer has levied the penalty of Rs.1,50,000/- which is the minimum under the provisions of section 271B of the Act.
5. Having considered the submissions of the Ld.DR as well as on going through the impugned orders of the authorities below, we find that the assessee has not disputed the fact of the turnover of the assessee of Rs.27,69,32,010/-. The assessee has also not disputed the requirement of books of account be audited as per the provisions of section 44AB of the Act.
Despite the fact that the books of account of the assessee were required to be added under section 44AB of the Act, the assessee has not explained the reasons for not getting the books of account audited. The Assessing Officer has levied the penalty as per paras 3 to 6 as under :-
In this case, the assessee has been absolutely non- cooperative and non compliant during the course of assessment proceedings. Despite the fact that all notices were duly served to the assessee, the assessee has never appeared nor submitted any details in regard to above said business turnover for AY 2012-13, which is Rs.27,69,32,010/-. As It is seen from the return of the income filed by the assessee, the total turnover of the assessee for AY 2012-13 is Rs.27,69,32,010/-, hence the books of accounts of the assessee pertaining to AY 2012-13 was required to be audited as per the provisions of the section 44AB of the IT Act, 1961. However, the assessee has not bothered to file the requisite Audit Report before the AO during the course of assessment proceedings. In absence of any detail, the AO was left with no other option but to pass the assessment order based on the information available on records of this office as per the provisions of the Section 144 of the Act., determining total income at Rs 2,21.54.560/-. - “4. Considering the above facts of the case, I have reason to believe and conclude that the assessee has defaulted in not getting his books of accounts audited as per provisions of section 44AB of the IT Act, having knowledge of the fact that his total receipts during the year under consideration was Rs. 27,69,32,010/-. A show-cause notice u/s 274 r.w.s. 271B was duly issued to the assessee on 27/63/2015 which was duly served on the assessee. The compliance of the assessee was required within 07 days from receipt of the above said notice dated 27/03/2015. However, neither the assessee attended personally or through an authorized representative to explain his case, nor was any written explanation submitted by the assessee in this regard. Thereafter, one more opportunity was given to the assessee by issuing one more letter dated 27/06/2015 requiring the assessee's compliance on or before 12/08/2015.This letter was also duly served on the assessee. Again, neither the assessee attended personally or through an authorized representative to explain his case, nor was any written explanation submitted by the assessee in this regard. Furthermore, the assessee was provided one more and last opportunity and the notice / letter dated 04/09/2015 was issued requiring the assessee's compliance on or before 18/09/2015 and the inspector of income tax, posted with this charge, was deputed to serve the said notice on the assessee personally. As per the inspector's report dated 14/09/2015, it has been found that the .assessee was not present at the said premises, hence the notice / letter was served upon the assessee by way of affixture. However, there is no response from assessee till date.
Considering the overall facts of the case, as discussed above, I am satisfied to treat the assessee a defaulter and penalty u/s 271B of the IT Act is justified in this case. Therefore, treating it a fit case for levy a penalty u/s 271B of the IT Act for not getting his books of accounts audited for AY 2012-13 as per provisions of section 44AB of the IT Act, I proceed to levy penalty which is worked out as below:
Particulars Amount in Rs. Amount of Penalty u/s 271B of the total turnover, i.e. 13,84,660 Rs.27,69,32,010/- Maxmimum penalty u/s 271B imposable 1,50,000 Penalty imposed being minimum penalty calculated as 1,50,000 above
6. Considering the facts and circumstance of the case I proceed to levy a penalty of Rs. 1,50,0007- u/s 271B of the IT Act for not getting his books of accounts audited for AY 2012-13 as per provisions of section 44AB of the IT Act.”
In view of the facts and circumstances of the case as discussed above and when the assessee has not explained the reasons for not getting his books of account audited, we do not find any reason to interfere with the orders of the authorities below levying the penalty under section 271B of the Act.