M/S R. K. MONDAL & BROTHERS,BURDWAN vs. ITO, WD-1(1), DURGAPUR, DURGAPUR

Since, these two captioned appeals relate to the same assessee, same assessment year, therefore, these have been clubbed and heard together and a consolidated order is being passed for the sake of convenience and brevity.

These two captioned appeals filed by the assessee against the orders of CIT(A) confirming the penalty in respect of violation of section 271A & 271(1)(b) of the I.T. Act, 1961.

M/s. R.K. Mondal & Brothers & 1146/Kol/2016 Assessment Year: 2010-11 4. First, we consider ITA No.1145/Kol/2016 in assessee’s appeal in A.Y 2010-11, which relates to violation o section 271A of the I.T. Act wherein the main grievance of the assessee is that the assessee maintaining books of account and books of accounts are subject to tax audit u/s 44AB of the Act. In spite of this, the AO imposed penalty u/s 271A of the Act.

We note that during the assessment proceedings which are discernible from the assessment order, the AO has himself stated that ld. Counsel for the assessee has produced cash book and other documents and because of that he proceeded to do the best judgment assessment u/s 144 of the Act. We note that during the appellate proceedings before the CIT(A), when the CIT(A) asked the AO to examine the issue and send the remand report to him and when the remand report was sought, the AO in his remand report clearly stated that cash book, ledger accounts and some payment vouchers were submitted by the assessee before him. We note that AO has not found any defects in the books of accounts produced by the assessee. When we consider the facts in totality during assessment proceedings and during appellate proceedings before CIT(A), we note that assessee, in fact, has been maintaining books of accounts as per the provisions of law. Moreover, the fact that assessee was maintaining the books of accounts and other records which were evident from the reply of the ld. Counsel for the assessee during the assessment proceedings where the ld. Counsel for the assessee submitted before the AO that the books of accounts were being maintained by the assessee but were misplaced, which fact was also recorded by the AO in his assessment order. Therefore, in sum and substance, the assessee was, in fact, was maintaining books of accounts and other records and has produced before the AO in the remand proceedings. Therefore, there is no justifiable reason to impose penalty u/s 271A of the Act. Therefore, we cancel the penalty u/s 271A of the Act.

In the result, the appeal filed by the assessee (in ITA No.1145/Kol/2016) is allowed. Page | 2