M/S SHIV KUMAR BAIGARA AND COMPANY,UDHAMPUR vs. INCOME TAX OFFICER UDHAMPUR, UDHAMPUR

ITA 358/ASR/2017Status: DisposedITAT Amritsar25 March 2019AY 2001-023 pages
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What did the Tribunal hold?

The Tribunal held that the penalty under Section 271A was wrongly levied as there was no finding that the assessee failed to maintain the specific books of accounts required by Section 44AA. The rejection of accounts under Section 145(3) does not automatically attract Section 271A.

What were the facts?

The assessee's accounts were rejected by the Assessing Officer (AO) for the Assessment Year 2001-02, leading to an estimated income. Subsequently, a penalty was levied under Section 271A for non-maintenance of accounts.

What were the issues?

Whether a penalty under Section 271A for non-maintenance of accounts can be levied solely based on the rejection of the assessee's accounts under Section 145(3).

Which sections of the Income-tax Act were involved?

Section 271A,Section 44AA,Section 145(3)

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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR (SMC

Before: SH. SANJAY ARORA

Hearing: 11.03.2019Pronounced: 29.03.2019

Per Sanjay Arora, AM: This is an Appeal by the Assessee directed against the Order by the Commissioner of Income Tax (Appeals)-Jammu ('CIT(A)' for short) dated 10.01.2017, confirming the levy of penalty u/s. 271A of the Income Tax Act, 1961 ('the Act' hereinafter) by the Assessing Officer vide order dated 26.03.2015 for Assessment Year (AY) 2001-02. 2. The assessment for the relevant year was completed u/s. 143(3) on 26.03.2004 by rejecting the assessee-firm’s accounts and estimating its’ income by applying a gross profit (GP) rate of 16%, i.e., as against the disclosed rate of 12.78%. The same stood confirmed in appeal, whereupon penalty proceedings u/s. 271A, i.e., for non-maintenance of accounts, initiated along with, were proceeded w

The order continues below.

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