Parag Hashmukhbhai Davda v. ITO

Case Laws Analysis
REFERRED Assistant CIT v. Hasmukh M. Shah 2003 TaxPub(DT) 0215 (Ahd-Trib)
REFERRED Abhay Kumar & Company v. Union of India & Ors. 1987 TaxPub(DT) 0558 (Raj-HC)

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The Tax Publishers2024 TaxPub(DT) 1210 (Rkt-Trib) IN THE ITAT, RAJKOT BENCH ANNAPURNA GUPTA, A.M. & T.R. SENTHIL KUMAR, J.M. Parag Hashmukhbhai Davda v. ITO ITA No. 118/RJT/2023 6 March, 2024 Assessee by: Rajendra Singhal, Ld. A.R. Revenue by: Ashish Kumar Pandey, D.R. ORDER *Annapurna Gupta, A.M.* The present appeal has been filed by the assessee against order passed by the learned Commissioner (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as ld. CIT (A) dated 2016-17 under section 250(6) of the Income Tax Act, 1961 ('the IT Act' for short) pertaining to assessment year 2016-17. 2. The assessee has raised the following grounds in his appeal: 1. The penalty order under section 271B of the Act is bad in law as well as facts. 2. The order of the learned NAFC is bad in law as well as facts. 3. The learned NAFC erred on facts as well as in law by confirming the penalty levied by the assessing officer under section 271B of the Act of Rs. 1,50,000. 3. We have heard both the parties. 4. Solitary challenge in the present appeal is against confirmation of levy of penalty under section 271B of the Act of Rs. 1.50 lacs. 5. The provisions of section 271B of the Act are reproduced in the assessment order, and a perusal of the same reveals that as per the said section, penalty is levied for failure to get accounts audited in terms of provisions of section 44AB of the Act. The provisions of section 44AB are reproduced in the assessment order also, a perusal of which reveals that every person carrying on business, if his total sales/turnover exceeds a prescribed limit, which in the impugned year is rupees one crore, they are required to get the accounts audited by an accountant. 6. For the sake of clarity, both the provisions of section 271B and provisions of section 44AB are being reproduced hereunder: Failure to get accounts audited. 271B. If any person fails to get his accounts audited in respect of any previous year or years relevant to an assessment year or furnish a report of such audit as required under section 44AB, the assessing officer may direct that such person shall pay, by way of penalty, a sum equal to one-half per cent of the total sales, turnover or gross receipts, as the case may be, in business, or of the gross receipts in profession, in such previous year or years or a sum of one hundred fifty thousand rupees, whichever is less. . . . . 44AB. Every person, (a) Carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds one crore rupees in any previous year: Provided that in the case of a person whose (a) Aggregate of all amounts received including amount received for sales, turnover or gross receipts during the previous year, in cash, does not exceed five per cent of the said amount; and SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2024 TaxPub(DT) 1210 (Rkt-Trib)

IN THE ITAT, RAJKOT BENCH

ANNAPURNA GUPTA, A.M. & T.R. SENTHIL KUMAR, J.M.

Parag Hashmukhbhai Davda v. ITO

ITA No. 118/RJT/2023

6 March, 2024

Assessee by: Rajendra Singhal, Ld. A.R.

Revenue by: Ashish Kumar Pandey, D.R.

ORDER

Annapurna Gupta, A.M.

The present appeal has been filed by the assessee against order passed by the learned Commissioner (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as ld. CIT (A) dated 2016-17 under section 250(6) of the Income Tax Act, 1961 ('the IT Act' for short) pertaining to assessment year 2016-17.

2. The assessee has raised the following grounds in his appeal:

1. The penalty order under section 271B of the Act is bad in law as well as facts.

2. The order of the learned NAFC is bad in law as well as facts.

3. The learned NAFC erred on facts as well as in law by confirming the penalty levied by the assessing officer under section 271B of the Act of Rs. 1,50,000.

3. We have heard both the parties.

4. Solitary challenge in the present appeal is against confirmation of levy of penalty under section 271B of the Act of Rs. 1.50 lacs.

5. The provisions of section 271B of the Act are reproduced in the assessment order, and a perusal of the same reveals that as per the said section, penalty is levied for failure to get accounts audited in terms of provisions of section 44AB of the Act. The provisions of section 44AB are reproduced in the assessment order also, a perusal of which reveals that every person carrying on business, if his total sales/turnover exceeds a prescribed limit, which in the impugned year is rupees one crore, they are required to get the accounts audited by an accountant.

6. For the sake of clarity, both the provisions of section 271B and provisions of section 44AB are being reproduced hereunder:

Failure to get accounts audited.

271B. If any person fails to get his accounts audited in respect of any previous year or years relevant to an assessment year or furnish a report of such audit as required under section 44AB, the assessing officer may direct that such person shall pay, by way of penalty, a sum equal to one-half per cent of the total sales, turnover or gross receipts, as the case may be, in business, or of the gross receipts in profession, in such previous year or years or a sum of one hundred fifty thousand rupees, whichever is less.

44AB. Every person,

(a) Carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds one crore rupees in any previous year:

Provided that in the case of a person whose

(a) Aggregate of all amounts received including amount received for sales, turnover or gross receipts during the previous year, in cash, does not exceed five per cent of the said amount; and