2019 (4) TMI 678

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....rief facts of the case are that assessee firm derives income from civil contractor but the ITR was not filed by the assessee within the time allowed as per the provisions of section 139 of the Income Tax Act, 1961 (in short "Act"). The same was filed on 17.2.2014 declaring total income of Rs. 20,000/-. Hence, the return could not be processed u/s. 143(1) of the Act. The assessment u/s. 147/143(3) of the Income Tax Act, 1961 was completed at an income of Rs. 4,40,600/-. AO observed that as per the provisions of section 44AB of the Act the assessee is under obligation to get its account audited and therefore, a show cause notice u/s. 271B of the Act was issued to the assessee on 17.3.2016 and in compliance to the notice, the assessee filed wr....

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....n made by the AO and vide written submission dated 25.2.2016, the AR of the assesse firm specifically submitted"....the assessee has maintained only cash book and ledger. The assessee has not maintained bills and vouchers regarding expenses...." Accordingly, the AO held that since the assessee has failed to comply the provision of section 44AB of the Act and therefore, is liable to be penalized u/s. 271B of the Act and made the penalty @0.5% of Rs. 67,950/- u/s. 271B of the Act vide order dated 30.10.2017. Against the said penalty order, assessee appealed before the Ld. CIT(A), who vide his impugned order dated 27.6.2018 has dismissed the appeal of the assessee. Aggrieved with the impugned order, assessee is in appeal before the Tribunal. ....

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....s provided u/s 275 of the Act that where the relevant assessment order or the other order is subject matter of appeal before the Ld. Commissioner of Appeals u/s 246A of the Act, penalty order has to be passed before the expiry of financial year in the course of which such proceedings have been initiated or within one year from the end of financial year in which order of the Commissioner (Appeals) is received by the Principal CIT - whichever is later. In this case the quantum of penalty to be imposed u/s 27I-B of the Act was dependent on the outcome of appellate order u/s 250 of the Act in the appeal filed against the assessment order passed by the AO. Therefore, the AO has validly kept the penalty proceedings u/s 27IB of the Act in abeyanc....