SURESH,THANJAVUR vs. COMMISIONER OF INCOME TAX APPEALS, DELHI

Aggrieved by confirmation of penalty u/s 271B for Rs.1,00,233/- vide impugned order dated 26.10.2023, the assessee is in further appeal before us.

From case records, it emerges that the assessee was assessed u/s 147 r.w.s. 144B on 28.03.2022. It transpired that the assessee deposited certain cash in the bank accounts but the assessee did not file return of income. Accordingly, the case was reopened. The assessee earned commission income from security services. The assessee submitted that the provisions of Sec.44AD would not apply and audit requirement was not applicable to the assessee. The assessee produced confirmation letter from CISB Facility Services Pvt. Ltd. confirming that the assessee was responsible for manpower employed at ATM located at certain locations. It was stated by the assessee that the cash was deposited and subsequently withdrawn for salary reimbursements. The assessee commission of 5% on cash deposit of Rs.200.46 Lacs. However, rejecting the same, taking help from the provision of Sec.44AD, Ld. AO estimated commission of 8% and framed the assessment. At the same time, Ld. AO levied impugned penalty of Rs.1 Lacs u/s 271B for failure to get its accounts audited u/s 44AB. The Ld. CIT(A) confirmed the same against which the assessee is in further appeal before us. 3. From the fact it emerges that the assessee has estimated his income @5% of cash deposit whereas Ld. AO has estimated the same @8% of cash deposit. There is no finding that the cash deposit, in its entirety, constitute business turnover of the assessee. It also emerges that the assessee has not maintained any books of accounts and income determination is on pure estimation. Considering this fact, there would be no question of levy of penalty for alleged default u/s 44AB. This is not a fit case of levy of penalty. By deleting the same, we allow the appeal of the assessee. No other ground has been urged before us.

The appeal stand allowed. Order pronounced on 19th March, 2024.