LAKSHMI SADHO COMMERCIAL PRIVATE LIMITED,KOLKATA vs. ITO, WARD 10(2), , KOLKATA

आयकर अपीलȣय अͬधकरण, कोलकाता पीठ, कोलकाता
IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH KOLKATA

SHRI RAJESH KUMAR, ACCOUNTANT MEMBER
&
BEFORE SHRI SONJOY SARMA, JUDICIAL MEMBER
Lakshmi Sadho Commercial Pvt.
Ltd.

134, Ashutosh Mukherjee Road,
Kol-25. Vs
ITO, Ward-10(2), Kolkata

PAN No. : AABCL6120C
(अपीलाथȸ /Appellant)
..
(Ĥ×यथȸ / Respondent)

Ǔनधा[ǐरती कȧ ओर से /Assessee by :
Shri Rajkumar Agarwal, AR
राजèव कȧ ओर से /Revenue by :
Shri Manoj Kr. Patil, JCIT, Sr. DR
सुनवाई कȧ तारȣख / Date of Hearing
:
10/09/2025
घोषणा कȧ तारȣख/Date of Pronouncement
:
08/12/2025
आदेश / O R D E R
PER SONJOY SARMA, JM :

This appeal by the assessee arises against the order dated
22.01.2025 of the National Faceless Appeal Centre (hereinafter referred to as the ‘CIT(A)’) passed under section 250 of the Income- tax Act, 1961 (the ‘Act’).
2. Brief fact of the case are that during the course of assessment proceedings, it was noticed that the assessee had shown a property valued at ₹1,35,95,500, whereas the fair market value was determined at ₹1,47,77,500 for the purpose of stamp duty. In the return of income, the assessee had declared the nature of business as trading under code 204. Based on this declaration, the Assessing Officer held that the assessee was required to get its accounts audited as per section 44AB of the Act. The Assessing Officer issued notice under section 274 r.w.s.
Lakshmi Sadho Commercial Pvt. Ltd.

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271B. In response, the assessee submitted that the investment in property did not pertain to business activity and therefore the provisions of section 44AB were not applicable. The assessee stated that the receipts were not business receipts and hence no audit was required. However, the Assessing Officer rejected the explanation and imposed a penalty of ₹67,977, being 0.5% of the sale value as per the assessee’s books, for non-compliance with section 44AB of the Act.
3. Aggrieved by the order of penalty order assessee went in appeal before ld. CIT (A) where the appeal of the assessee was dismissed by sustaining the penalty order.
4. Dissatisfied with the order of the Ld. CIT(A), assessee is before this Tribunal, the assessee contended that the penalty imposed is bad in law because the receipts against the property were not during the course of business and therefore section 44AB of the Act could not be invoked. Even assuming the receipts were business receipts, the assessee was under a bona fide belief that such receipts were capital in nature. Besides that where constitutes reasonable cause within the meaning of section 273B of the Act, no penalty could be levied.

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respect to the impugned property transaction.
In such circumstances, section 44AB of the Act cannot be mechanically applied. Further, section 273B of the Act provides that no penalty shall be imposed if the assessee proves that there was a reasonable cause for the default. In the present case, whether the receipts constitute business income or capital receipts is itself debatable. The assessee’s bona fide belief that the receipts were not business receipts constitutes a reasonable cause within the meaning of section 273B of the Act. Therefore, in our considered view, the penalty levied under section 271B of the Act is not justified. Accordingly, we set aside the penalty imposed under section 271B of the Act and grant relief to the assessee.

Ǒदनांक Dated: 08/12/2025
RS

आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy of the Order forwarded to :

आदेशानुसार/ BY ORDER,

(