TaxTMI 
TaxTMI 
2012 (7) TMI 648
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....sessing Officer of levying the penalty u/s 271B of the I T act and failed to appreciate the facts of the case." 3 The assessee is an individual and admitted income from share trading/speculation and F&O transactions at Rs. 24,93,396/- apart from commission/brokerage receipt of Rs. 8,40,000/-. The gross receipts admitted as per the P&L Account was Rs. 33,33,395/- . The assessee has not filed the taxed audit report for the year under consideration. The Assessing Officer noticed that the assessee incurred losses on speculation as well as F&O transaction and after set off of such loss, the net income was Rs. 24,93,395/-, which was credited to the P&L Account. The Assessing Officer was of the view that if the negative and positive income earned....
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.... the assessee was under bonafide impression that when the profit credited to the P&L account is only Rs. 33.33 lacs, the assessee was not required to file tax audit report u/s 44AB. The ld AR has submitted that since it was the first year of the assessee carried out the transaction of trading in shares and therefore, under bonafide belief and due to lack of proper knowledge of legal provisions, the assessee did not get the accounts audited u/s 44AB. The ld AR has submitted that the explanation furnished by the assessee is reasonable and bonafide and therefore, in the facts of the case, penalty u/s 271B is not warranted. He has referred the letter dated 16.2.2010 filed before the Assessing Officer on 12.3.2010 and submitted that the assessee....
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....he 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.]" 6 The language and particularly the expression "the Assessing Officer may direct that such person shall pay" as used in sec 271B makes it clear that levy of penalty for not filing the audit report as required u/s 44AB is not automatic; but It is discretionary on the part of the Assessing Officer. The discretionary power exercised by the quasi judicial authorities should be judicious and as per principle of law a....