TAYAB KHAN,ANGUL vs. ITO, WARD-2, DHENKANAL
In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.
What did the Tribunal hold?
The Tribunal held that the assessees' explanation for non-maintenance of books of account due to the perishable nature of fish and high turnover was not valid. The CIT(A)'s confirmation of the penalty was upheld by following previous tribunal decisions.
What were the facts?
The assessees failed to maintain books of account despite their business income exceeding Rs. 1,20,000 and turnover exceeding Rs. 10 lakhs. The Assessing Officer levied a penalty under Section 271A for this violation.
What were the issues?
Whether the penalty for non-maintenance of books of account under Section 271A is justified when the business income and turnover exceed the prescribed limits under Section 44AA.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, CUTTACK
Before: SHRI N.S SAINI
These are appeals filed by the different assessees against the
separate orders of CIT(A)-2, Bhubaneswar, all dated 1.9.2016, for the
assessment years 2009-10, 2010-2011 & 2011-12, respectively.
At the outset, ld Authorised Representatives of the assessee
submitted that in all these appeals the common ground of appeal taken is
that the CIT(A) erred in confirming the levy of penalty of Rs.25,000/-
u/s.271A of the Act for non-maintenance of books of account .
For the sake of convenience, the facts in the case of Khusida Bibi in
ITA No.76/CTK/2017 for the assessment year 2009-2010 is adjudicated
and the decision will apply mutatis-mutandis to other appeals of the
assessees.
I have heard the rival submissions and perused the orders of lower
authorities and materials available on record. The undisputed facts of the
case are that the Assessing Officer observed that the assessee failed to
keep and maintain books of account as per provisions of section 44AA of
the Income tax Act, 1961, which provides that where income from business
or profession exceeds Rs.1,20,000/- or the total sales, turnover or gross
receipts of the business, in business or profession exceeds Rs.10 lakhs. He
noted that during the years under consideration, the income from trading
of fish of the assessee has exceeded Rs.1,20,000/- and, therefore, he
levied penalty of R.25,000/- u/s.271A of the Act for non-maintenance of
books of account in violation of section 44AA of the Act
4 On appeal, the CIT(A) observed that the Assessing Officer estimated
the assessee’s income @ 5% of turnover of Rs.3,00,64,000/- amounting to
Rs.20,09,590/-, which on appeal, was estimated by the CIT(A) @ 2% of
Rs.3,00,64,000/-. Thus, the CIT(A) held that the assessee’s contention
that even in the absence of books of account, the assessee’s income could
be derived was not correct.
Further, the CIT(A) observed that the assessee has stated that fish
is a perishable commodity and as the turnover is very high, it was difficult
for the assessee to maintain books of account. He observed that every
commodity has its own peculiarity and books of account can be maintained
after the transaction of purchase and sale is over on the basis of weight
and the agreed price. Similarly, the details of expenses are available with
the assessee as the assessee makes the payment of it and hence, the
explanation of the assessee for non-maintenance of the books of account
is not valid. He observed that the Chandigarh Benches of the Tribunal in
the case of Pirthi Chand vs ITO, 10 SOT 657 (Chd) has observed that since
the income of the assessee from kiryana business was more than
Rs.1,20,000/-, assessee’s case was covered by provisions of section 44AA
of the Act and the Assessing Officer was justified in his action in levying
penalty under section 271A of the Act. He further observed that similarly
Agra Bench of the Tribunal in the case of Ashok Kumar Varshney vs ITO,
28 taxmann.com 266 (Agra) held that the assessee was running a retail
cloth shop and the total turnover of the assessee was more than Rs.10
lakhs and the assessee did not maintain any books of account or other
documents in support of income declared in return and, therefore, the
Assessing Officer was justified in levying penalty under section 271A of the
Act for non-maintenance of books of account as per provisions of section
44AA of the Act. Hence, he confirmed the levy of penalty under section
271A of the Act.
Before me ld A.R. of the assessee reiterated the submissions made
before the lower authorities.
Ld D.R. supported the orders of lower authorities.
I find that no positive material has been brought on record to
controvert the findings of the CIT(A) that the income computed under the
head “business or profession and gains” of the assessee in the present
appeals was more than Rs.1,20,000/- and the turnover in each case was
more than Rs.10,00,000/-. No specific error could be pointed out by ld A.R.
of the assessee in the order of the CIT(A). Further, no good reasons could
be shown as to why the CIT(A) was not justified in following the decisions
of the Chandigarh Benches of the Tribunal in the case of Pirthi Chand(supra)
and the Agra Bench of the Tribunal in the case of Ashok Kumar Varshney
(supra). Hence, I find no good reason to interfere with the order of the
CIT(A) which is confirmed and the grounds of appeal of the assessee is
dismissed
In the result, the appeals filed by the assessees are dismissed. Order pronounced in the open court on 31 /05/2017 . Sd/- (N.S Saini) ACCOUNTANT MEMBER Cuttack; Dated 31 /05/2017 B.K.Parida, SPS Copy of the Order forwarded to : 1. The Appellants concerned : 2. The respondent: ITO, Ward -2, Denkanal 3. The CIT(A)2 Bhubaneswar 4. Pr.CIT-2, Bhubaneswar, 5. DR, ITAT, Cuttack 6. Guard file. //True Copy// BY ORDER, SR.PRIVATE SECRETARY ITAT, Cuttack
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