INCOME TAX ACT, 1961

Section 271B

Penalty under section 271B - Assessee being medical practitioner - Whether business or profession -

Assessee was a medical practitioner and running a maternity home. AO noted that assessee's accounts were not audited despite the eligible turnover of professional receipts and no audit report was submitted. Therefore, AO initiated the penalty proceedings and issued the notice under section 271B. In penalty proceedings under section 271B, AO invoked the provisions of section 44AB and imposed the penalty which was equal to one half percent of the gross total receipts of the assessee. Held: It was an undisputed fact that assessee was a qualified doctor, a Gynecologist and Anesthetist. She runs a nursing home. Assessee also attended patients and treats them in OPD and others. Therefore, mere running a nursing home/hospital does not convert a medical doctor into a business woman. Further, it was not the case of assessee that she received salary from a hospital and there was no service agreement to support such an arrangement. Therefore, assessee was covered by provisions of section 44AA and penalty was rightly imposed under section 271B.

Distinguished:Nirmal Kumar Joshi & Anr. v. ITO vide [ITA No. 73/JP/2018 Order, dt. 27-3-2018]Relied:Natwarlal Ambalal Dave v. CIT (1997) 225 ITR 936 (Guj).

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2003-04

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