S SHIRISH S DHANDE,NAGPUR vs. A.C.I.T. CENTRAL CIR.,- 1(2), NAGPUR

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ITA 46/NAG/2017Status: DisposedITAT Nagpur22 November 2021AY 2007-084 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that failure to produce books of accounts does not automatically mean they were not maintained, especially when they were audited and produced during original assessment. The penalty under section 271A was therefore unsustainable.

What were the facts?

Following a search and seizure action, the assessee was issued a notice under section 153A. The Assessing Officer levied a penalty under section 271A for non-maintenance of books of accounts due to the assessee's failure to produce them during the proceedings.

What were the issues?

Whether a penalty under Section 271A for non-maintenance of books of accounts is leviable solely on the failure to produce them during post-search proceedings, despite prior audit and production.

Which sections of the Income-tax Act were involved?

Section 132,Section 153A,Section 271A,Section 143(3),Section 44AB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BENCH, NAGPUR

Before: SHRI INTURI RAMA RAO, AM & SHRI S. S. VISWANETHRA RAVI, JM

For Appellant: Shri Mukesh Agrawal
Hearing: 11.11.2021Pronounced: 22.11.2021

ORDER PER BENCH : These are the appeals filed by the different assessees directed against the respective orders of ld. Commissioner of Income Tax (Appeals)-3, Nagpur [‘CIT(A) for short] for the assessment years 2003-04 to 2009-10 respectively. 2. Since the identical facts and issues are involved in all the appeals, we proceed to dispose of the same by this common order.

1.

2 to 55/NAG/2017 3. For the sake of convenience and clarity, the facts relevant to the appeal in ITA No.43/NAG/2017 for the assessment year 2004-05 are stated herein.

4.

Briefly, the facts of the case are as under : The appellant is an individual carrying on business of profession of doctor. The return of income u/s 139(1) of the Income Tax Act, 1961 (‘the Act’) for the assessment year 2004-05 was filed on 01.11.2004 declaring total income of Rs.3,74,940/-. Subsequently, there was a search and seizure action u/s 132 in the hospital premises of the appellant on 10.04.2008. Consequent to the search and seizure action u/s 132, a notice u/s 153A was issued to the appellant calling upon to file the return of income. In response to the same, the appellant filed the same return of income as filed u/s 139(1) on 19.07.2010. During the course of assessment proceedings u/s 153A, the appellant was called upon by the Assistant Commissioner of Income Tax, Central Circle-1(2), Nagpur (‘the Assessing Officer’) to produce the books of accounts for whatsoever reasons. The appellant had not complied with such notice. Consequence of this, the Assessing Officer presumed that no books of accounts were maintained by the appellant and levied penalty of Rs.25,000/- u/s 271A of the Act rejecting the explanation that books of accounts were produced during the course of original assessment proceedings and the books of accounts were audited under the provisions of section 43AB of the Act. Even on appeal before the ld. CIT(A), the same was confirmed.

5.

Being aggrieved, the appellant is in appeal before us in the present appeal.

3 to 55/NAG/2017 6. When the matter was called on, none appeared on behalf of the assessee despite due service of notice. We heard the ld. Sr. DR and perused the material on record. The issue in the present appeal relates to the levy of penalty u/s 271A for non-maintenance of books of accounts. The Assessing Officer presumed that no books of accounts were maintained by the appellant for failure to produce the books of accounts during the course of proceedings pursuant to notice issued u/s 153A of the Act. The contention of the appellant that the books of accounts were audited under the provisions of section 43AB and the same were produced before the Assessing Officer for verification during the course of original assessment proceedings u/s 143(3) remained uncontroverted. The Assessing Officer had failed to take note of distinction between failure to produce the books of accounts and non- maintenance of books of accounts. Mere failure of production of books of accounts does not lead to the conclusion that no books of accounts were maintained especially in the light of the fact that the original assessment proceedings were completed u/s 143(3) after due verification and the books of accounts were audited by the Auditor under the provisions of section 44AB of the Act. The provisions of Income Tax Act prescribes different penal provision for failure to produce the books of accounts. Therefore, the conclusion drawn by the Assessing Officer that no books of accounts were maintained by the appellant has no legs to stand. Therefore, we are of the considered opinion that the order of penalty levied u/s 271A cannot be sustained in the eyes of law. Accordingly, we direct the Assessing Officer to delete the penalty of Rs.25,000/- levied u/s 271A of the Act. Thus, the issue raised by the assessee in the grounds of appeal stands allowed.

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