SMT. SHANTA SINGHVI,SOJAT CITY, PALI. vs. ITO, WARD-3, PALI.

Facts of the case in brief are that the Assessing Officer levied the impugned penalty by observing that the assessee was engaged in business of trading of shares, derivatives and commodities etc and the turnover of the assessee was to the tune of Rs. 2,45,98,66,113/-. During the year under consideration the assessee was required to maintain the books of account as per the provisions of section 44AA of the Act but the assessee did not maintain the books of account. He, therefore, imposed the penalty of Rs. 25,000/-.

Being aggrieved, the assessee carried the matter to the Ld. CIT(A) and furnished the written submissions which had been incorporated in par 5 of the impugned order. For the sake of repetition, the same are not reproduced herein.

The Ld. CIT(A) after considering the submissions of the assessee sustained the penalty by observing in para 6 of the impugned order as under:-

Now the assessee is in appeal.

We have considered the submissions of both the parties and perused the material available on record. in the present case, Ld. counsel for the assessee although submitted that the penalty u/s 271A of the Act was not leviable but could not controvert the findings given by the Ld. CIT(A) in the impugned order. We, therefore, considering the totality of facts are of the view that the penalty levied u/s 271A of the Act was rightly sustained by the Ld. CIT(A) since the assessee inspite of having the turnover of Rs. 2,45,98,66,113/- had not maintained the books of account which were required to be maintained u/s 44AA of the Act. In that view of the matter, we do not find any valid ground to interfere with the findings given by the Ld. CIT(A) for sustaining the penalty of Rs. 25,000/- levied by the Assessing Officer u/s 271A of the Act.

In ITA No. 294/Jodh/2018, the only grievance of the assessee relates to sustenance of penalty levied by the Assessing Officer u/s 271B of the Act for a sum of Rs. 1,50,000/-.

Facts of the case in brief are that the assessee was engaged in the business of trading of shares, commodities etc and the turnover of the assessee was to the tune of Rs. 2,45,98,66,113/- during the year under consideration and the assessee was required to maintain the books of account as per the provisions of section 44AA of the Act and got the same audited as per the provisions contained in section 44AB of the Act but the assessee did not get the accounts audited, therefore, the Assessing Officer levied the penalty of Rs. 1,50,000/- u/s 271B of the Act for not getting the books of account audited.

Being aggrieved, the assessee carried the matter to the Ld. CIT(A) and furnished the written submissions which has been reproduced in para 5 of the impugned order by the Ld. CIT(A), for the sake of repetition, the same is not reproduced herein.

The Ld. CIT(A) after considering the submissions of the assessee sustained the penalty levied by the Assessing Officer by observing in para 6 of the impugned order as under:- “6. I have considered the penalty order and appellant’s submissions. I find that the appellant has done frequent transactions while trading in commodities, stocks and shares during the year under consideration due to which the total turnover of the appellant has reached to the tune of Rs.2,45,98,66,113/- which is in excess of the limit prescribed under Section 44AA and 44AB of the Act. The appellant was required to maintain the books of accounts during the year under consideration and get the same audited too. The AR’s plea that the appellant has failed to maintain the books of accounts during the year under consideration, therefore, the audit of the books of accounts of not possible at all is not acceptable. Merely because the appellant did not maintain books of accounts cannot be a ground for not levying penalty with regard to audit under Section 44AB of the Act. Maintaining books of accounts and audit of books of accounts are mandatory under relevant sections of the Income Tax Act, 1961 and penalties are also imposable under the sections relevant thereto. These two acts are independent of each other and the defaults are also to be treated separately. Considering the facts and circumstances of the instant case, I find that the AO is correct in imposing penalty of Rs. 1,50,000/- under Section 271B of the Act in this case, therefore, the same is, hereby, sustained. The appellant fails on this issue. The ground Nos. 1 to 5 raised by the appellant regarding this issue are, hereby, dismissed.”

Now the assessee is in appeal.

The Ld. counsel for the assessee submitted that the assessee was not having the books of account so there was no question of getting the same audited and that a penalty u/s 271A of the Act for non maintaining the books of account was levied by the Assessing Officer and since there were no books of account, penalty levied u/s 271B of the Act for not getting those audited was not justified. Reliance was placed on the following case laws:- a) CIT Vs. S.K. GUPTA AND CO., [2010] 322 ITR 86 (All.) b) CIT Vs. Bisauli Tractors [2008] 299 ITR 219 (All.)

In his rival submissions, the Ld. Sr. DR strongly supported the orders of the authorities below.

We have considered the submissions of both the parties and have carefully gone through the material available on record. In the present case,

On a similar issue the Hon’ble Allahabad High Court in the case of CIT Vs. S.K. Gupta and Co. [2010] 322 ITR 86 (All.) (supra) held as under:-

Similar view has been taken by the Hon’ble Allahabad Hon'ble High

So, respectfully following the ratio laid down by the Hon’ble Allahabad High Court in the aforesaid referred to cases, the penalty levied by the Assessing Officer and sustained by the Ld. CIT(A) u/s 271B of the Act is deleted.

In the result, the appeal of the assessee in ITA No. 293/Jodh/2018 is dismissed and in ITA No. 294/Jodh/2018 is allowed.

""यथ"/ The Respondent 3. आयकरआयु"त/ CIT 4. आयकरआयु"त (अपील)/ The CIT(A)

"वभागीय""त"न ध, आयकरअपील"यआ धकरण, च%डीगढ़/ DR, ITAT, Jodhpur 6. गाड(फाईल/ Guard File