AGRAWAL NARENDRA JWALAPRASAD,HUF,,JALGAON vs. INCOME-TAX OFFICER, WARD - 1(3),, JALGAON

This appeal preferred by the assessee emanates from the order of the ld. CIT(A)-2, Nashik, dated 10-12-2018 for A.Y. 2011-12 as per the grounds of appeal on record.

The only grievance of the assessee as appearing in the grounds of appeal memo is the imposition of penalty by the A.O u/s 271B of the Income- tax Act, 1961 (hereinafter referred to as “the Act”) and as confirmed by the ld. CIT(A) of Rs. 1,50,000/- for failure to get the books of accounts audited as per section 44AB of the Act.

At the time of hearing none appeared for the assessee. There was no adjournment petition filed before us. Notices were served at the given address. Hence case was heard recording submissions of the ld. D.R and as per the documents/materials available on record.

Brief facts in this case are that during the assessment proceedings information was called for u/s 133(6) of the Act from National Multi Commodity Exchange of India Ltd (NMCEIL). As per the information received from 2 Agrawal N. Jwalaprasad HUF A.Y. 2011-12 NMCEIL the assessee entered commodity transaction and as per the statement of transaction furnished by the NMCEIL total turnover of the assessee during the F.Y. 2010-11 relevant to A.Y. 2011-12 was at Rs. 77,41,76,811/-. From the aforesaid transaction it is clear that the total turnover exceeds basic limit of Rs. 60 lakhs and as per the provision of the Act, the assessee was liable to get his accounts duly audited and furnished the audit report in form No. 3CB and 3CD within the prescribed time limit as per the provisions of sec. 44AB of the Act, but the assessee has failed to do so. Therefore, a show cause notice u/s 274 r.w.s. 271B of the Act was issued to the assessee which was duly served asking the assessee for compliance on 12-1-2017. The assessee neither attended nor submitted any compliance to the said show cause notice. Thereafter, another letter dated 30-05-2017 giving final opportunity of hearing was issued to the assessee for compliance and attendance on 07-06-2017. The assessee neither attended nor submitted any compliance regarding non- furnishing of audit report u/s 44AB of the Act. Inspite of all these opportunities given since the assessee failed to appear before the A.O., it was opined that it does not have any just and cogent reason for such statutory violation and hence penalty u/s 271B of the Act was levied.

Before the ld. CIT(A), the assessee had contended that for non- maintenance of the books of account, the A.O should have imposed penalty u/s 271A of the Act and therefore, it was not correct for the A.O to impose penalty u/s 271B of the Act. The ld. CIT(A) after considering the submissions of the assessee and the assessment order placed reliance on the decision of Bombay High Court in the case of Arjunkumar J. Muchhala Vs. CIT-8, in of 2015, order dated 24-08-2017 wherein it was held as follows:

We observe from the records and the orders of subordinate authorities that it is an undisputed fact that the commodity transactions entered into as per the statement of NMCEI it had exceeded basic limit of Rs. 60 lakhs and therefore, has attracted the provision of sec. 44AB of the Act requiring the assessee to get its accounts audited and filed books of accounts along with the audit report in the prescribed form 3CB and 3CD within the prescribed time limit and in this case, the assessee has failed to do so. These facts are not disputed anywhere in the records before us. When the statutory obligation has been provided that it has to be complied with by the assessee and in this case since as per sec. 44AB was not complied with, the A.O was correct in imposing penalty u/s 271B of the Act. Even the Hon’ble Bombay High Court in the case of Arjunkumar J. Muchhala (supra) has categorically spelled out that when assessee is doing the business, it was incumbent on him to maintain proper books of accounts and if he fails to do so, he cannot be allowed to take advantage of his own wrongs. We do not find any infirmity with the findings of the ld. CIT(A) which is hereby upheld.

In the result, appeal of the assessee is dismissed.