2014 (12) TMI 440

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....he profit and loss account. On the basis of the return filed and information gathered by the Assessing Officer, notice under Section 271B of the Act was issued by the Assessing Officer to show cause why a penalty should not be imposed on the ground that the assessee had failed to get his account audited under Section 44AB of the Act as he had failed to disclose the turnover on sale of cylinders amnounting to Rs. 4,73,45,398/- and since the turnover exceeded Rs. 40 lacs, the assessee was under a legal obligation to get his books of account audited under Section 44AB of the Act. The appellant filed his reply contending that since no order has been passed no penalty proceedings could be initiated. The appellant further submitted that the appel....

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....iness of purchase and sale of gas cylinders and that he was only getting a commission. It was urged that since the commission given to the appellant by the Indian Oil Corporation was less than Rs. 40 lacs, the appellant was under no obligation to get the accounts audited under Section 44AB of the Act. Having heard the learned counsel for the appellant and having perused the record, we find that the agreement clearly indicated that the appellant was appointed as a distributor on principal to principal basis for sale of gas cylinders to consumers. The terms and conditions shows that the appellant was carrying on business of supply of gas cylinders to the consumers and that the assessee was carrying on the business of purchase and sale of gas....

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....n assessee shows reasonable cause, penalty may not be imposed. The learned counsel for the appellant further placed reliance upon a decision of this Court in Commissioner of Income Tax Vs. S.K. Gupta and Co., (2010) 322 ITR 86 in which it was held that where the books of accounts was not maintained, the question of getting the books of account audited would not arise and, consequently, penalty proceedings could not be initiated under Section 271A of the Act. Having heard the learned counsel for the appellant, we find that it has not come on record that the assessee had not maintained any books of account. In the light of this assertion being absent, the decision of a Division Bench of this Court in S.K. Gupta and Co. (supra) is not applic....