RAKESH CHAUBEY,PATNA vs. DCIT/ACIT CEN. CIR-2, PATNA, PATNA

Brief facts of the case are that the assessee has filed his return of income. Thereafter it appears that search was carried out upon the assessee and notice under section 153A was issued. The assessments have been framed under section 153A and dissatisfied with those assessments, the assessee carried the matter in appeals before the ld. CIT(Appeals).

Apart from the quantum appeal, ld. Assessing Officer has visited the assessee with penalty under section 271A of the Income Tax Act. The penalty under section 271A of the Income Tax Act is imposable on account of failure of the assessee to keep and maintain any such books of account and other documents as required by section 44AA or the Rules made there under in respect of any previous year or to retain such books of account and other documents for the period specified in the said Rule. The ld. Assessing Officer has imposed a penalty of Rs.25,000/- in each year.

Dissatisfied with the penalty order, the assessee carried the matter in appeals before the ld. CIT(Appeals). Apart from the penalty appeal, quantum appeals were also pending before the ld. CIT(Appeals). During the penalty proceeding, the assessee contended that levy of penalty be kept in abeyance because quantum appeals are pending before the ld. CIT(Appeals), but ld. Assessing Officer did not accept this contention of the assessee and visited the assessee with penalty. Similarly ld. 1st Appellate Authority has dismissed these appeals for want of prosecution. For the facility of reference, the conclusion of the ld. CIT(Appeals) recorded in the 1st appeal, i.e. ITA No. 133/PAT/2023 in A.Y. 2013-14 reads as under:- “The appellant Shri Rakesh Kumar Chaubey was covered by a search operation u/s 132A of the Act on 06.10.2020. During the course of search proceedings as well as during the assessment proceedings, the appellant failed to produce books of accounts for verification by the AO. Accordingly, the AO issued penalty notice u/s 271A for non-maintenance of books of accounts. During the course of penalty proceedings u/s 271A, the appellant did not prove that the books of account was maintained by him. The appellant did not comply to the notices. He merely requested the AO to keep the penalty proceedings in abeyance till finalization of quantum appeal from the Commissioner of Income-Tax (Appeal) for the relevant AY. The AO was of the opinion that penalty u/s 271A was not connected with the points of addition made in the assessment order and accordingly after discussion on the circumstances, the AO levied the penalty of Rs. 25,000/- for non- 3

Sub-clause (6) of Section 250 contemplates that ld. 1st Appellate Authority would formulate the point in dispute and thereafter record reasons in support of such conclusion on those points. The ld. Counsel for the assessee submitted that after decision of these penalty appeals, ld. CIT(Appeals) has decided the quantum appeals whereby he has deleted all the additions by holding that no incriminating material was found during the course of search on the basis of which additions could be made under section 153A of the Income Tax Act. The ld. Counsel for the assessee has further apprised that the 1st Appellate Authority has relied upon the judgment of the Hon’ble Supreme Court in the case of PCIT-Vs.- Abhisar Buildwell Pvt. Ltd. (149 taxmann.com 399).

On the other hand, ld. D.R. submitted that levy of penalty under section 271A has no relevancy with the quantum of addition if deleted or sustained.

In the result, all the appeals are allowed for statistical purposes. Order pronounced in the open Court on 28.08.2023.