YOGENDRA SINGH SHEKHAWAT,JAIPUR vs. ITO, JAIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR Jh Hkkxpan] ys[kk lnL;] ds le{k BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER vk;dj vihy la-@ITA No. 1001/JP/2016 fu/kZkj.k o"kZ@Assessment Year : 2011-12 cuke Yogendra Singh Shekhawat, Income Tax Officer, Vs. 30, Chand Bihari Nagar, Ward-3(1), Khatipura, Jaipur. Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AISPS 3054 N vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Anil Sharma (CA) jktLo dh vksj ls@ Revenue by : Smt. Poonam Rai (DCIT) lquokbZ dh rkjh[k@ Date of Hearing : 10/03/2017 mn?kks"k.kk dh rkjh[k@ Date of Pronouncement : 24/04/2017 vkns'k@ ORDER

PER: BHAGCHAND, A.M. This is an appeal filed by the assessee emanates from the order of the ld. CIT(A)-I, Jaipur dated 11/08/2016 for the A.Y. 2011-12. The only issue involved in this appeal is against confirming the penalty of Rs. 1,00,000/- levied U/s 271B of the Income Tax Act, 1961 (in short the Act) for not getting the books of account audited as required U/s 44AB of the Act.

ITA 1001/JP/2016_ 2 Yogendra Singh Shekhawat Vs ITO

has submitted that the assessee is a retail supplier of milk and not

maintaining books of account. The return of income filed U/s 44AB of the

Act. The Assessing Officer observed that the gross receipts of the

assessee were Rs. 3,11,33,296/-, which exceeds limit for maintaining

books of account and get them audited U/s 44AB of the Act. The

Assessing Officer initiated the penalty U/s 271A and 271B of the Act for

not maintaining books of account and not getting them audited as per

provisions of Section 44AA and 44AB of the Act respectively. The

Assessing Officer levied the penalty U/s 271A of the Act for not

maintaining the books of account vide order dated 29/5/2014. The copy

of the order was submitted and thereafter the Assessing Officer also

levied the penalty for failure to get books of account audited as required

U/s 44AB of the Act of Rs. 1.00 lac on 29/5/2014. The ld AR submitted

that once the Assessing Officer has concluded that the assessee has not

maintaining books of account then there cannot be a question of getting

them audited. The ld AR relied on the decision of the Gauhati High court

in the case of Surajmal Parasram Todi Vs. CIT 222 ITR 691, wherein the

Hon'ble High Court has dealt such situation and held that where no books

of account were maintaining, the levy of penalty U/s 271B was held

ITA 1001/JP/2016_ 3 Yogendra Singh Shekhawat Vs ITO

erroneous. The ld AR relied on the decision of Hon’ble Allahabad High

Court in the case of CIT Vs. Bisauli Tractors (2008) 299 ITR 219 wherein

similar view has been affirmed. The ld AR relied on the decision of

Hon’ble Pune Bench of ITAT in the case of Ram Prakash C. Puri Vs. ACIT

77 ITD 210 wherein by following the decision of Hon’ble Gauhati High

court in the case Surajmal Parasram Todi Vs. CIT (supra), the penalty

levied U/s 271B was deleted. The ld AR distinguished the case law relied

upon by the ld. CIT(A) in the case of S.J. Agarwal & Co. Vs. ITO (2008)

114 ITD 27 (Pune).

authorities below.

levied the penalty U/s 271A of the Act for the reason that during the

assessment proceedings, the Assessing Officer noticed that the assessee

has failed to maintain his books of account for the year under

consideration as required by Section 44AA of the Act on 29/05/2014. On

the same date, the same Assessing Officer also levied the penalty U/s

271B of the Act for the reason that during the course of assessment

proceedings, it was noticed that the assessee has failed to get his books

of account audited during the year under consideration as required by

ITA 1001/JP/2016_ 4 Yogendra Singh Shekhawat Vs ITO

Section 44AB of the Act. The ld. CIT(A) confirmed the penalty by relying

on the decision of S.J. Agarwal & co. Vs. ITO (supra) wherein the

assessee filed trading account and P&L account showing figures and

decimals while in assessee’s case return was filed U/s 44AB of the Act and

no trading and P&L account and balance sheet was filed. Further in the

case of S.J. Agarwal & co. Vs. ITO (supra), the Assessing Officer gave a

finding that the assessee was maintaining books of account, which were

not got audited and in that case no penalty U/s 271A for not maintaining

the books of account were levied. Thus, the case law relied by the ld

CIT(A) is distinguishable on the facts itself. Therefore, the reliance of the

ld. CIT(A) for sustaining the penalty is not justified. The Hon’ble Gauhati

High Court Surajmal Parasram Todi Vs. CIT (supra) dealt with the similar

situation has held as under:-

“Section 44AA of the Income-tax Act, 1961, imposes a duty on the assessee to maintain books of account and on failure to do so the assessee shall be liable to be penalised under section 271A of the Act. Even after maintenance of books of account the obligation of the assessee does not come to an end. He is required to do something more, i.e., by getting the books of account audited by an accountant. But when a person commits the offence of not maintaining the books of account as contemplated by section 44AA the offence is complete. After that there can be no possibility of any offence as contemplated by section 44AB and, therefore, penalty cannot be imposed under section 271B of the Act.”

ITA 1001/JP/2016_ 5 Yogendra Singh Shekhawat Vs ITO

Similarly in the case of CIT Vs. Bisauli Tractors (supra), the Hon’ble

Allahabad High court has held as under:-

“Penalty provision in a taxing statute has to be strictly construed. Penalty is exigible only where a person falls within the four corners of the penal provisions, otherwise not. Separate penalty has been provided for non-maintenance of accounts, i.e., under section 271A of the Income-tax Act, 1961, and for not getting the accounts audited and not furnishing the audit report, i.e., under section 271B . If a person has not maintained account books or any accounts the question of audit does not arise. In such an event the imposition of penalty under the provision contained in section 271A for alleged non-compliance with section 44AA may arise but the provisions of section 44AB do not get violated in a case where accounts have not been maintained at all and therefore the penal provisions of section 271B of the Act would not apply.” Considering the ratio laid down by the Hon'ble High Courts and the facts

of the case, I direct to delete the penalty.

Order pronounced in the open court on 24/04/2017.

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सहायक पंजीकार@Aेेज. त्महपेजतंत