KARTHIKEYARAJ,ULUNDURPET vs. ITO, WARD-1,, VILLUPURAM

There is a delay of 169 days in filing the appeal by the assessee. The assessee has filed condonation petition stating the reasons for delay in filing the appeal. We have considered the petition of delay in filing the appeal and satisfied that there was sufficient cause for not filing the appeal within the prescribed time limit. Hence, the delay is condoned accordingly.

When the case was called for hearings, no one appeared on behalf of the assessee. The case was first listed 21.11.2024, but no one appeared from assessee side. The notice was then served through Ld DR, and case was fixed on 10.12.2024. Again no one appeared from assessee side and case was re-fixed on 08.01.2025. No one appeared from assessee side again and another notice was issued through Ld DR, fixing the date on 03.02.2025. As no one is appearing from assessee side, the case is being decided on its merits with the able assistance of the Ld. Departmental Representative (DR), Shri Murugesan, Addl. CIT.

The only effective ground of appeal in this appeal of assessee is against the order of Ld. CIT(A) in confirming the penalty levied by the A.O u/s. 271B of the Act for not filing the audit report. :- 3 -:

The assessee is engaged in retail and wholesale trading of cement, cement sheet and hollow blocks operating under the business in the name of M/s. Karthikeyaraj Prop. Annamalai Traders. The assessee had cash deposit of Rs. 1,22,03,000/- in the current account, but has not filed return of income. The A.O has reopened the assessment by issuing notice u/s. 148 of the Act and the assessee has filed return of income showing total income of Rs.7,65,560/- on the total turnover of Rs.1,82,75,756/-. Since the turnover of the assessee exceeded Rs. 1 crore, the assessee was required to get the accounts audited and file the audit report. However, the assessee failed to file the report. Therefore, the A.O has levied a penalty of Rs. 91,378/-, which is 5% of the turnover u/s. 271B of the Act. The assessee has provided the reason for not filing the audit report, stating that he is a small-scale dealer, did not have permanent staff for accounting, and the part-time accountant quit without informing the assessee. However, the A.O. did not accept this as a reasonable cause. Aggrieved, the assessee has filed an appeal before the Ld. CIT(A). The Ld. CIT(A) after going through the statement and the order of A.O confirmed the penalty. The Ld. CIT(A) has observed that the A.O has correctly pointed out that the turnover of the assessee required him to maintain proper books of account u/s. 44A of the Act and to get the :- 4 -:

We have gone through the orders of lower authorities. We find that the assessee is in the business of wholesale and retail trading in cement, cement sheet and the total turnover of the business is Rs. 1,82,75,756/-. The assessee has not filed return of income u/s. 139(1) of the Act and has not submitted the audit report as prescribed u/s. 44AB of the Act. The assessee is therefore is clearly liable for penalty us/. 271B of the Act. The assessee has provided the reason for non- filing of audit report, stating that the part-time Accountant left without informing or providing any details. In our considered opinion, this is not a reasonable cause for the failure of filing the audit report. We, therefore uphold the order of Ld. CIT(A) and confirm the penalty levied u/s. 271B of the Act. In view of the above, the appeal filed by the assessee is dismissed. :- 5 -:

In the result, the appeal filed by the assessee is dismissed.