TaxTMI 
TaxTMI 
2013 (2) TMI 287
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....e, contended that the assessee was prevented by sufficient cause from filing the appeal within the period of limitation and nominal delay may be condoned. The ld. DR has no objection on condonation of delay. Considering the explanation of the assessee supported by medical certificate and affidavit of the assessee and particularly when the DR has no objection, we are satisfied that the assessee was prevented by sufficient cause from filing the appeal within the period of limitation. The delay in filing the appeal is, accordingly, condoned. 3. Briefly, the facts of the case are that the assessee filed return of income on 31.03.2006 declaring total income of Rs. 76,620/-. The assessee declared income from running of retail cloth shop. The case was selected for scrutiny on the basis of AIR information. As per AIR information, the total transactions of Rs. 29,92,410/- were made on different dates by the assessee through his bank account with Syndicate Bank, Hathras. During the course of assessment proceedings, full information in regard to other bank accounts were also collected from Syndicate Bank, Hathras and it was found that the assessee has another account in his name through wh....
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....as liable to maintain the books of account as per provisions of section 44AA(2) and further the assessee has claimed his income to be lower than the profits and gains so deemed of the business. Therefore, provisions of section 44AA are applicable in this case. The ld. CIT(A) also found that the assessee has not been able to furnish any cogent reasons for non-maintenance of books of account and accordingly, penalty was confirmed and the appeal of the assessee was dismissed. 4. The ld. counsel for the assessee reiterated the submissions made before the authorities below and submitted that when income was computed u/s. 44AF, penalty should not be levied. He has also submitted that according to section 44AA (2) when the assessee keeps and maintains such books of account and other documents enabling the AO to compute the business income of the assessee and the assessee produced bank account to the AO showing the total turnover made through the above bank accounts, the assessee made sufficient compliance. He has submitted that when the provisions of section 44AF are applied, there is no need to maintain any books of account. The ld. counsel for the assessee relied upon the following d....
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....ssessee's case. Section 271A of the IT Act provides - "Failure to keep, maintain or retain books of account, documents, etc. 271A. Without prejudice to the provisions of section 271, if any person fails to keep and maintain any such books of account and other documents as required by section 44AA or the rules made thereunder, in respect of any previous year or to retain such books of account and other documents for the period specified in the said rules, the [Assessing] Officer or the Commissioner (Appeals) may direct that such person shall pay, by way of penalty, a sum of twenty-five thousand rupees." Section 44AA of the IT Act provides - "Maintenance of accounts by certain persons carrying on profession or business. 44AA. (1) Every person carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or any other profession as is notified by the Board in the Official Gazette shall keep and maintain such books of account and other documents as may enable the Assessing Officer to compute his total income in accordance with the provisions of this Act. (2) Every person carrying ....
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....e case may be, a sum higher than the aforesaid sum as declared by the assessee in his return of income shall be deemed to be the profits and gains of such business chargeable to tax under the head "Profits and gains of business or profession" : Provided that nothing contained in this sub-section shall apply in respect of an assessee whose total turnover exceeds an amount of forty lakh rupees in the previous year. (2) Any deduction allowable under the provisions of sections 30 to 38 shall, for the purposes of sub-section (1), be deemed to have been already given full effect to and no further deduction under those sections shall be allowed : Provided that where the assessee is a firm, the salary and interest paid to its partners shall be deducted from the income computed under sub-section (1) subject to the conditions and limits specified in clause (b) of section 40. (3) The written down value of any asset used for the purpose of the business referred to in sub-section (1) shall be deemed to have been calculated as if the assessee had claimed and had been actually allowed the deduction in respect of the depreciation for each of the relevant assessment years. (4) The pr....
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....t filed in accordance with the provisions of section 44AF of the IT Act. Further, the assessee claimed lower profit and gains as against the provisions of section 44AF. Therefore, it was mandatory for the assessee to keep and maintain such books of account and other documents as required u/s. 44AA(2)(iii) of the Act. Admittedly, the total turnover, sales or gross receipts of the assessee are more than Rs. 10.00 lacs and the assessee failed to support its claim of lower profit. Therefore, merely because the AO computed income subsequently with the aid of section 44AF would not absolve the assessee from maintenance of account books and other documents as required by law. The AO has mentioned that nothing was produced before him for verification of the income declared in the return of income. The AO did not find any alternate except to estimate the income u/s. 44AF. Thus, the assessee did not maintain any books of account and other documents so as to enable the AO to compute his total income in accordance with the provisions of the Act. Therefore, the provisions of section 44AA(2)(iii) and 44AF(5) would clearly apply in the case of the assessee. The provisions of section 44AF(4) would....