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Income Tax Appellate Tribunal, MUMBAI BENCH “E”, MUMBAI
Before: SHRI G.S.PANNU & SHRI AMARJIT SINGHSmt. Snehal Rajendra Pathak,
ORDER PER G.S.PANNU,A.M:
The captioned appeal filed by the assessee pertaining to assessment year 2009-10 is directed against an order passed by CIT(A)-28 Mumbai dated 18/03/2014, which in turn, arises out of an order passed by the Assessing Officer under section 271B of the Income Tax Act, 1961(in short ‘the Act’), dated 28/06/2012.
In this appeal, assessee has raised the following Grounds of appeal:-
“The learned commissioner of income tax (appeal) has erred in confirming penalty rs.44951/- against the principal of nature justice.
Your appellate submit that in stock market net effect of sales & purchase of shares should be taken for calculating limit u/s 44AB of for 40 lacs. Your appellate therefore prays your honour to delete the penalty co firm by the commissioner of income tax appeal u/s 271B should be deleted.”
At the time of hearing none appeared on behalf of the assessee inspite of issuance of notice of hearing by RPAD, therefore, we proceed to decide the appeal ex-parte, qua the assessee after hearing Ld. Departmental Representative as per Rule 24 of Income- Tax (Appellate Tribunal)Rules, 1963. The only issue in this appeal relates to levy of penalty of Rs.54,645/- under section 271B of the Act.
In brief, the relevant facts are that the assessee is an individual, whose source of income is by way of salary and from other sources namely, interest income. The Assessing Officer noted that during the period under consideration assessee had undertaken sale and purchase of shares. The Assessing Officer noted that the total sales were to the tune of Rs.1,09,28,994/-, which was in excess of the limit prescribed under section 44AB of the Act and, therefore, assessee was required to get her accounts audited. On the failure of the assessee to get her accounts audited in terms of section 44AB of the Act, the Assessing Officer levied penalty of Rs.54,645/-.
The claim of the assessee before the lower authorities has been that she was under a bonafide belief that only the net of sales and purchases is required to be seen for the purposes of section 44AB of the Act and that such an amount was below the prescribed limit of Rs.40,00,000/-. The Assessing Officer as well as the CIT(A) were not satisfied with the explanation furnished and accordingly levied penalty under section271B of the Act.
After hearing Ld. Departmental Representative and on perusal of the orders of the authorities below we find that the bonafide belief of the assessee can be a good ground to mitigate the rigours of section 271B of the Act. Quite clearly, the income tax authorities have not doubted the bonafides of the claim made by the assessee but the same has been merely brushed aside. Therefore, it is directed that the penalty of Rs.54,645/- levied under section 271B of the Act be deleted.
In the result, appeal of the assessee is allowed, as above.