TAYAB KHAN,ANGUL vs. ITO, WARD-2, DHENKANAL

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ITA 82/CTK/2017Status: DisposedITAT Cuttack31 May 2017AY 2009-105 pages

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

AI SummaryDismissed

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?

Section 44AA,Section 271A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CUTTACK

Before: SHRI N.S SAINI

For Appellant: Shri D.K.Sheth/Mohit Sheth
For Respondent: Shri B.N.Dash, DR

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.

2.

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 .

3.

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.

4.

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.

5.

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.

6.

Before me ld A.R. of the assessee reiterated the submissions made

before the lower authorities.

7.

Ld D.R. supported the orders of lower authorities.

8.

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

9.

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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