Penalty for non-maintenance of stock register fails where no specific books were prescribed for a section 44AA(2) assessee.

Penalty under section 271A could not be sustained where an assessee covered by section 44AA(2) had maintained cash book, ledger, and purchase and sale vouchers, but not a stock register. Rule 6F applies to persons falling under section 44AA(1) and does not extend to business assessees governed by section 44AA(2). Because the statute and applicable rules did not prescribe specific books of account for the relevant year, and the maintained records enabled computation of income, the omission to keep a stock register did not attract penalty. Relief was therefore available to the assessee.

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Issues: Whether penalty under section 271A was leviable for alleged failure to maintain the books of account and stock register required under section 44AA, and whether rule 6F of the Income-tax Rules, 1962 applied to the assessee carrying on business under section 44AA(2).

Analysis: Section 44AA(1) applies to specified professions, while section 44AA(2) governs persons carrying on other business or profession once the prescribed monetary thresholds are crossed. The Board's rule-making power under section 44AA(3) and (4) extends to prescribing the books and retention period, but rule 6F specifically prescribes books for persons covered by section 44AA(1) and does not extend to business assessees covered by section 44AA(2). The assessee had maintained cash book, ledger and purchase and sale vouchers, and the remand report accepted that the vouchers were maintained and examined. The only alleged lapse was non-maintenance of stock register and inventory. As the relevant law did not prescribe the specific books of account to be maintained by such an assessee for the assessment year in question, and penalty provisions must be construed strictly, the omission could not attract section 271A.

Conclusion: Penalty under section 271A was not leviable, and the assessee was entitled to relief.

Ratio Decidendi: Where the statute and the applicable rules do not prescribe specific books of account for a taxpayer covered by section 44AA(2), penalty under section 271A cannot be imposed merely for non-maintenance of a stock register, if the assessee has otherwise maintained books enabling computation of income.

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