ATUL A SANGHVI,MUMBAI vs. DCIT CEN CIR 11, MUMBAI

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ITA 504/MUM/2014Status: DisposedITAT Mumbai16 March 2017AY 2001-024 pages
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What did the Tribunal hold?

The tribunal upheld the penalty for non-maintenance of books of accounts (Section 271A). However, following High Court precedents, the tribunal set aside the penalty for failure to get accounts audited (Section 271B) if no books of accounts were maintained.

What were the facts?

The assessee appealed against penalties levied for non-maintenance of books of accounts and failure to get accounts audited. The assessee admitted to not maintaining books of accounts for commission income.

What were the issues?

Whether penalty under Section 271B is attracted when no books of accounts are maintained. Whether the penalty for non-maintenance of books of accounts is sustainable.

Which sections of the Income-tax Act were involved?

Section 271A,Section 271B,Section 44AB

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Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI

Before: SHRI SHAMIM YAHYA & SHRI RAVISH SOOD

For Appellant: Shri. Rakesh Joshi
For Respondent: Shri. Rajesh Kumar Yadav

PER BENCH: are appeals by the assessee against common order of CIT-A, for concerned assessment years wherein Ld. CIT-A has confirmed the levy of penalty of Rs. 25,000/- each u/s. 271 A.

1.

Atul A Sanghvi 505, 506, 507, 508, 509, 510, 511,512, 513, 514, 515, 516, 517/Mum./2014 2. ITA No. 511/Mum/2014 to ITA No. 517/mum/2014 are appeals by the assessee against common order of Ld. CIT-A wherein he has confirmed the levy of penalty of Rs. 1 lac each u/s. 271 B for the concerned assessment year.

3.

Since the appeals were heard together these are being consolidated and disposed of together by this common order.

4.

Appeal against penalty u/s. 271 A.

5.

At the outset Ld. Counsel submitted that penalty has been levied for non-maintenance of books of accounts. He submitted that assessee has not been doing any business he was only receiving commission. Ld. Counsel fairly agreed that for the earning of commission income too assessee should have maintained books of accounts. In view of the aforesaid admission by the Ld. Counsel of the assessee that assessee has not maintained required books of accounts we do not find any infirmity of the order of Ld. CIT-A. Accordingly we uphold the same.

6.

Appeals against levy of penalty u/s. 271 B.

7.

On this issue we note that penalty has been levied for not getting the accounts audited u/s. 44 A B. On this issue Ld. Counsel of the assessee submitted that when the assessee has been found to be not maintaining books of accounts, there is no question of levy of penalty u/s. 271 B for failure to get the accounts audited. In this Atul A Sanghvi 505, 506, 507, 508, 509, 510, 511,512, 513, 514, 515, 516, 517/Mum./2014 regard Ld. Counsel placed reliance upon following Hon’ble Allahabad High Court decision wherein it was held that where no books of accounts are maintained by the assessee penalty u/s. 271 B is not attracted. i) CIT vs. S. K Gupta & Company (322 ITR 0086). ii) CIT vs. Bisauli Tractors (299 ITR 0219) 8. No jurisdictional High Court decision contrary to the above proposition was brought before us.

9.

Accordingly respectfully following the precedents from the Hon’ble High Court decision as above we set aside the above orders of authorities below and delete the levy of penalty u/s. 271 B.

In the result assessee’s appeals in to 510 are dismissed and assessee’s appeal in ITA No. 511 to 517 are allowed.

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