PARASURAMAN,CUDDALORE vs. ASSESSING OFFICER, CUDDALORE

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ITA 2093/CHNY/2025Status: DisposedITAT Chennai21 October 2025AY 2022-23Bench: SHRI M. BALAGANESH (Accountant Member), SHRI S.S. VISWANETHRA RAVI (Judicial Member)4 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal ruled that the revenue, having accepted the assessee's income as commission and the source of deposits in the quantum assessment, could not contradict this in penalty proceedings. It clarified that only the commission income, not the gross collections, should be considered for the Section 44AB threshold, and since the commission did not exceed it, the penalty under Section 271B was not justified.

What were the facts?

The assessee, engaged in collecting stamp duty/registration charges for a commission, filed his return with commission income, which was accepted in quantum assessment. However, the AO levied a penalty under Section 271B, asserting that the gross collections (exceeding Rs. 3 crores) constituted turnover requiring a Section 44AB audit, a decision upheld by the Ld.CIT(A).

What were the issues?

Whether penalty under Section 271B for non-audit under Section 44AB was justified when the actual commission income did not exceed the threshold, despite large gross receipts, and if the revenue could take a contradictory stand after quantum assessment.

Which sections of the Income-tax Act were involved?

Section 271B,Section 143(3),Section 144B,Section 44AB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI

Before: SHRI M. BALAGANESH & SHRI S.S. VISWANETHRA RAVI

Hearing: 21.10.2025Pronounced: 21.10.2025

O R D E R

PER M. BALAGANESH, AM :

1.

This appeal by the assessee is filed against the order of the learned Commissioner of Income Tax (Appeal), NFAC, Delhi, (in short Ld.CIT(A) for the assessment year 2022-23, vide order dated 23.06.2025. 2.0 The only issue to be decided in this appeal is as to whether the Ld.CIT(A) was justified in confirming the levy of penalty u/s 271B of the act in the facts and circumstances of the instant case.

ITA. No:2093/Chny/2025 3.0 None appeared on behalf of the assessee despite issuance of notice. Hence, we proceed to dispose of this appeal on hearing the Ld.DR and based on materials available on record. The assessee is an individual and had filed his return of income for the AY-2022-23 on 20.10.2022 declaring a taxable income of Rs.5,04,770/- which includes net commission income. The assessee submitted that he was engaged in the business activities of collecting money from public as payment towards stamp duty and pay to Tamil Nadu Government Registration Department. For rendering this services, the assessee was getting commission which was duly offered in the tax return. During the course of scrutiny assessment of the assessee framed u/s 143(3) r.w.s. 144B of the Act on 12.02.2024 wherein the source for cash deposits made by the assessee in the bank account was subject matter of examination. The explanation offered by the assessee explaining source of cash deposit was duly accepted and assessment was completed accepting the return of income. It is pertinent to note that no shifting of head of income was even contemplated by the revenue in the quantum assessment proceedings. Further, the Ld.AO in the quantum assessment order in Page-6, para-3.4.2 had even accepted that the assessee is engaging in earning commission business income. However, the Ld.AO pleaded that assessee had received registration charges from public to the tune of Rs.3,29,58,336/- which constitute turnover of the assessee and that the said turnover had exceeded the threshold limit of getting accounts audited u/s 44AB of the Act and accordingly initiated penalty proceedings u/s 271B of the Act for not getting his accounts audited u/s. 44AB of the Act. This culminated in passing of penalty order dated 28.08.2024 levying penalty of Rs.1,50,000/- u/s 271B of the Act, which stood upheld by the Ld.CIT(A). 4.0 We find that the explanation given by the assessee explaining the source of cash deposit to be emanating out of the monies received on Page 2 of 4

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