AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2020 (1) TMI 865
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....hown at Rs. 39,78,709/- whereas in Form No.26AS gross receipts subjected to tax deducted at source were appearing at Rs. 55,01,093/-. Ld. AO was of the view that since the turnover of the assessee exceeded to Rs. 40 lakhs, he was required to get the account audited u/s 44AB of the Act. However, since the assessee failed to get the books of accounts audited u/s 44AB of the Act. Ld. AO levied the penalty u/s 271B of the Act, at Rs. 27,505/-. Against the levy of penalty u/s 271B of the Act assessee filed an appeal before the ld. CIT(A) but failed to succeed. 3. Now the assessee is in appeal before the Tribunal raising following grounds: "1. That on the facts and in the circumstances of the case the ld. CIT(A) erred in not holding that the order dated 30.01.2017 passed by Ld. Assessing Officer for levy of penalty u/s 271B of the Act was wrong and invalid as the same was (a) Barred by Limitation; and (b) passed by ignoring the reasonable causes u/s 234B; and (c) the default was merely technical and venial and revenue has not suffered any loss due to that ;and (d) due to other reasons. 2. Ground No.2 (in the nature of submission) 1.1 That the order dated 30.01.2017 is barred by li....
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....s. ITO Kishangarh ITA No.73/JP/2018 (I.T.A.T. Jaipur) 5. Per Contra Ld. Departmental Representative (DR) supported the orders of the lower authorities but failed to controvert the contention of the Ld. counsel for the assessee that the issue is covered in favour of assessee by the decision of Coordinate Bench, Indore in the case of Vinay Agrawal vs. ITO(supra). 6. We have heard rival contentions and perused the record placed before us and carefully gone through the decisions referred and relied by the ld. counsel for the assessee. Sole issue on merits relates to levy of penalty u/s 271B of the Act at Rs. 27,505/- on the assessee for not getting account audited u/s 44AB of the Act. We observe that in the return of income filed in compliance notice u/s 148 of the Act assessee has disclosed turnover of Rs. 39,78,709/- and offered income u/s 44AB of the Act @ of 8% as net profit. Since the turnover was less than of Rs. 40 laksh, assessee did not get account audited u/s 44AB of the Act. During the course of assessment proceeding when the assessing officer examined the return filed by the assessee in light of Form No.26AS (which is a statement of tax deducted at source by various perso....
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....ed in confirming the action of Ld. AO of including a sum of Rs. 38,40,500/-, alleging the same as undisclosed turnover, to determine the limit prescribed u/s 44AB by ignoring the fact that the said amount was not recorded in regular books of accounts thus could not be considered for levy of penalty u/s 44 AB of the Income Tax Act, 1961. 2. That the appellant craves the right to add, delete, amend or abandon any of the grounds of appeal either before or at the time of hearing of appeal." 12. The above grounds were adjudicated by the I.T.A.T., Jaipur Bench in favour of the assessee observing as follows: We have considered the rival submissions as well as relevant material on record. There is no dispute that the assessee has declared the turnover of Rs. 24,80,995/- and the income was declared U/s 44AD of the Act in the return of income. The turnover declared by the assessee in the books of account and return of income does not exceed the limit provided U/s 44AB of the Act and therefore, there was no mandatory requirement of books of account to be audited U/s 44AB of the Act. The Assessing Officer during the survey U/s 133A of the Act conducted in the case of one Shri P.C. Vijayv....
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....ered under section 44AD(1), the AO has thus accepted the assessee's eligibility for presumptive basis of taxation under section 44AD. Once the said eligibility is accepted, if we read the provisions of section 44AD and in particular sub-section (5), it clearly provides that an eligible assessee who claims his income from the eligible business is below the presumptive rate of 8% of total turnover or gross receipts, he shall be required to maintain books of accounts and also get them audited and furnish a report as required under section 44AB of the Act. Therefore, only in a scenario, where such a claim is made by the assessee whereby he claims that his income to be lower than 8% of total turnover or gross receipts, he will be required to maintain books of accounts and get them audited. Corresponding provisions are provided in section 44AA(2)(iv) of the Act as well. In the instant case, the assessee has not made any such claim in his return of income. Further, the Revenue has accepted the claim of the assessee as being eligible for such presumptive taxation where the assessee has reported a net profit of 8.09% on total reported turnover of Rs. 48,98,269. In such a situation, havi....
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....ir face, that they are kept in the 'regular course of business'. So, the accounts under s. 34 of Indian Evidence Act means accounts which are maintained in the regular course of business. Accordingly we are satisfied that the record carrying entries from which the appellant admits of additional sales are not the accounts as referred to under s. 44AB of the Act. On that basis it was not open to the AO to hold that the sales of the assessee as referred in s. 44AB of the Act have exceeded to Rs. 40 lakhs and by not getting such accounts audited from an accountant, the appellant has committed a default. Such a finding arrived at by the AO is reversed." 10. In light of above discussions and in the entirety of facts and circumstances of the case, the penalty levied under section 271B is hereby deleted. In the result, the appeal of the assessee is allowed." The addition made by the Assessing Officer during the assessment proceedings on the basis of unaccounted sale cannot be regarded as the turnover for the purpose of Section 44AB of the act because the documents relied upon by the A.O. are neither the part of books of account nor would substitute the books of account or constit....