Appeal allowed against penalty for 2013-14 assessment year due to unwarranted increase in turnover. The Appellate Tribunal ITAT Hyderabad allowed the assessee's appeal against the penalty imposed by the AO under section 271A for the assessment year ...
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Appeal allowed against penalty for 2013-14 assessment year due to unwarranted increase in turnover.
The Appellate Tribunal ITAT Hyderabad allowed the assessee's appeal against the penalty imposed by the AO under section 271A for the assessment year 2013-14. The Tribunal found that the penalty was unwarranted as the increase in turnover did not necessitate the maintenance of books under section 44AB. Consequently, the penalty was set aside, and the appeal of the assessee was allowed.
Issues: Assessee's appeal against penalty u/s 271A for A.Y 2013-14.
Analysis: The Appellate Tribunal ITAT Hyderabad heard the appeal of the assessee against the penalty imposed by the AO u/s 271A of the Act for the assessment year 2013-14. The AO initiated the penalty as the gross receipts exceeded Rs. 1.00 crore, requiring the maintenance of books u/s 44AB, which the assessee failed to do. The CIT (A) confirmed the penalty, leading the assessee to appeal before the Tribunal.
The counsel for the assessee argued that the addition to gross receipts was based on unexplained cash credits in the bank account, which cannot be considered as books of account. It was contended that since the gross receipts were below Rs. 1.00 crore, there was no obligation to maintain books of account. Therefore, the assessee sought deletion of the penalty u/s 271A.
On the other hand, the learned DR supported the decisions of the lower authorities. The Tribunal, after considering the facts, noted that the gross receipts exceeded Rs. 1.00 crore due to the unexplained cash credits being treated as turnover. The AO's addition to turnover was based on the inability of the assessee to explain the cash credits, but there was no concrete evidence that all deposits were business receipts. Consequently, the Tribunal concluded that the penalty u/s 271A was unwarranted as the increase in turnover did not necessitate the maintenance of books u/s 44AB. Therefore, the appeal of the assessee was allowed, and the penalty was set aside.
In conclusion, the Tribunal allowed the appeal filed by the assessee, finding that the penalty u/s 271A was not applicable in this case. The order was pronounced in the Open Court on 15th March 2019.
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