TARAK NATH SAHA MONDAL,KOLKATA vs. ITO, WD-50(4), KOLKATA, KOLKATA

The assessee in the present case is an individual who filed his return of income for the year under consideration on 30.03.2012 declaring a total income of Rs. 1,26,160/-. In the said return, net profit of Rs. 1,48,317/- was declared by the assessee on the gross receipts of Rs. 21,68,920/- from his eligible business. Since the net profit so declared at 6.83% was below 8%, the Assessing Officer was of the view that the assessee was required to get his accounts audited as per section 44AB read with section 44AD of the Act. Since this 2 Assessment Year: 2011-12 Tarak Nath Saha Mondal requirement was not complied with by the assessee, penalty proceedings under section 271B were initiated by the A.O. During the course of the said proceedings, no explanation was offered by the assessee in response to the show cause notice issued by the A.O. The A.O., therefore, presumed that the assessee had no explanation to offer for the default committed by him under section 44AB and he proceeded to impose a penalty of Rs. 10,845/- under section 271B of the Act.

The penalty imposed by the A.O. under section 271B was challenged by the assessee in the appeal filed before the Ld. CIT(A) and since the assessee could not offer any satisfactory explanation for his default committed under section 44AB, the Ld. CIT(A) confirmed the penalty imposed by the A.O. under section 271B. Aggrieved by the order of the Ld. CIT(A), the assessee has preferred this appeal before the Tribunal.

We have heard the arguments of both the sides and also perused the relevant material available on record. As rightly pointed out by the learned counsel for the assessee from Clause (d) of Section 44AB as applicable to the year under consideration, every person carrying on the business was required to get his accounts audited if profits and gains from the business were deemed to be the profits and gains of such person under section 44AD and he had claimed such income to the lower than the profits and gains so deemed to be the profits and gains of the business and his income exceeded the maximum amount which was not chargeable to income tax in the