K.TAMILSELVI,PERAMBALUR vs. DCIT, TRICHY

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ITA 708/CHNY/2017Status: DisposedITAT Chennai15 June 2017AY 2006-074 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that if an assessee opts for the presumptive taxation scheme under Section 44AE, maintaining books of accounts is not mandatory. Therefore, the penalty levied under Section 271A was not leviable.

What were the facts?

The assessee, engaged in hiring out five lorries, filed her return of income by applying Section 44AE. Despite accepting the returned income under Section 143(1), the AO levied a penalty under Section 271A for not maintaining books of accounts.

What were the issues?

Whether a penalty under Section 271A for non-maintenance of books of accounts is leviable when the assessee has opted for the presumptive taxation scheme under Section 44AE.

Which sections of the Income-tax Act were involved?

Section 44AE,Section 271A,Section 143(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI

Before: SHRI GEORGE MATHAN, & SHRI A. MOHAN ALANKAMONY

Pronounced: 15.06.2017

आदेश / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER:

1.

Order of Commissioner of Income Tax (Appeals)-1, Tiruchirapalli, in ITA No.60/2009-10/CIT(A)-1/Try. dated 31.01.2017 for the AY 2006-07.

2.

Shri Sasikumar, JCIT, represented on behalf of the Revenue and the assessee represented in-person.

ITA No.708/Mds/201 :- 2 -:

3.

It was submitted by the Assessee that the assessee plied five lorries during the previous year and the said lorries were exclusively used for transportation of two wheelers. The assessee had applied the provisions of Sec.44AE and had filed her return of income on 27.10.2006. The return of income filed by the assessee was processed u/s.143(1) on 24.03.2008.

The returned income of the assessee was accepted. Subsequently, notice u/s.271A was issued on 28.01.2009 on the assessee in respect of the non- maintenance of books of accounts. The assessee had submitted that she owned five lorries and was engaged in the business of hiring them. The assessee had submitted that the assessee had filed her return applying the provisions of Sec.44AE of the Act. However, as the assessee had calculated her total gross receipts at Rs.39,83,376/- and Rs.33,45,706/- as expenditure, on the ground that no books were maintained, the AO levied penalty u/s.271A. On a specific query, it was submitted by the assessee that the assessee had admitted an income of Rs.10,17,670/- by applying the provisions of Sec.44AE. On appeal, Ld.CIT(A) had confirmed the levy of penalty. It was a submission that the Order of the Ld.CIT(A) be reversed.

4.

In reply, the Ld.DR vehemently supported the Order of the AO and the Ld.CIT(A).

5.

We have considered the rival submissions. Admittedly, the assessee has returned an income of Rs.10,17,670/- as income from plying of five

ITA No.708/Mds/201 :- 3 -: lorries. The returned income of the assessee has been accepted so far as the return was processed u/s.143(1) on 24.03.2008. The assessee admittedly has given the details, her total receipts and expenditure. If the total receipts and expenditure are considered, the assessee’s net profit would be around Rs.6,37,600/- but the assessee has offered higher income by applying the provisions of Sec.44AE. Just because the assessee has not mentioned Sec.44AE in her return and has given the details of her total receipts and expenditure, it does not make the return of income filed by her to be not u/s.44AE. She would obviously have to give the details of her total receipts to claim the benefit of the TDS. Therefore, it cannot be said that the assessee has filed her return by not applying the provisions of Sec.44AE. The fact that the provisions of Sec.44AE is made available to the assessee’s who are plying 10 lorries or less than 10 lorries shows that the legislature was well-aware of such small assessee’s, finding it difficult to maintain the necessary staff. In any case, shorn of all the frills, it is clear that the assessee has filed her return of income by declaring her income by applying the provisions of Sec.44AE and this is not disputed by the Revenue. Once the assessee is filing her return of income and disclosing her income on the basis of Sec.44AE, it is not mandatory on the assessee to maintain her books of accounts. This being so, we are of the view that no penalty u/s.271A is leviable in the hands of the assessee. Consequently, the penalty as levied by the AO and as confirmed by the Ld.CIT(A) stands deleted.

ITA No.708/Mds/201 :- 4 -:

6.

In the result, the appeal filed by the assessee stands allowed.

Order pronounced in the Open Court on June 15, 2017, at Chennai.

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