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Facts
The Assessing Officer levied a penalty under Section 271B on the assessee for not getting books audited, based on a turnover of Rs. 21,05,31,563/-. The assessee contended that he was a commission agent and believed his actual turnover for audit purposes was only commission income, which was below the audit threshold. The quantum addition was settled under the Vivad Se Vishwas Scheme, 2024, but the penalty was confirmed by the CIT(A).
Held
The Tribunal found that the assessee had a genuine belief that his actual turnover for the purpose of Section 44AB was only his commission income. Therefore, the Tribunal concluded that a reasonable cause was adequately made out under Section 273B of the Act, leading to the deletion of the penalty levied under Section 271B.
Key Issues
Whether the assessee had a reasonable cause under Section 273B for not getting his books audited under Section 44AB, warranting the deletion of the penalty levied under Section 271B.
Sections Cited
250, 271B, 44AB, 273B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH KOLKATA
Before: SHRI GEORGE MATHAN & SHRI SANJAY AWASTHI
Present for: Appellant by : Shri Soumitra Choudhury & Shri P. Sarkar, Advocates Respondent by : Shri Dheeraj, Addl. CIT, Sr. DR Date of Hearing : 08.05.2025 Date of Pronouncement : 19.05.2025 O R D E R
Per Sanjay Awasthi, Accountant Member :
The present appeal emanates from order passed u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) on 20.11.2024 by Ld. CIT(A), NFAC, Delhi. Through this order, the action of the Assessing Officer in confirming the penalty levied u/s. 271B of the Act has been confirmed.
1.1. Briefly, the Assessing Officer has levied the impugned penalty on the ground that the turnover of business of the assessee was to the tune of Rs.21,05,31,563/-. It is seen that the assessee pleaded that he was only a commission agent and the addition made in quantum was settled under the Vivad Se Vishwas Scheme, 2024. However, the Assessing Officer levied the impugned penalty and the same was also confirmed by the Ld. CIT(A).
Abinash More, AY: 2017-18 1.2. Before us, the Ld. AR has pleaded that the assessee was under the belief that he was only a commission agent and hence, his turnover was below the limit prescribed for getting the books audited u/s. 44AB of the Act. On this count, the Ld. AR strongly supported that a case u/s. 273B of the Act was made out.
1.3. The Ld. DR, on the other hand, relied on the orders of the authorities below.
We have considered the rival submissions and gone through the records. It is felt that the assessee could be under a genuine belief that the actual turnover was only the turnover pertaining to the commission income. Accordingly, we feel that a case for reasonable cause is adequately made out u/s. 273B of the Act and we delete the penalty so levied by the Assessing Officer and confirmed by the Ld. CIT(A).
In the result, appeal of the assessee is allowed.
Order pronounced on 19th May, 2025.