TaxTMI 
TaxTMI 
2020 (2) TMI 982
X X X X Extracts X X X X
X X X X Extracts X X X X
....t for imposition of penalty without issuing any notice U/s. 139(9)/139(9)(f) of the I.T. Act as a pre condition for such imposition is bad in law. (ii) For that the learned AO is erred by invoking the provision of Section 44AD of the I.T. Act as the turnover of the assessee during the AY did not exceed the threshold limit. 3. Brief facts of the case are that a search and seizure action u/s.132 of the Act was conducted against the assessee on 03.09.2015. In consequence to that search, the cases of the assessee for assessment years under consideration were taken up for assessment u/s.153A of the Act and the assessment was framed for the assessment year 2016-2017 u/s.143(3) of the Act making various additions on the basis of various documents filed by the assessee. During the course of assessment proceedings, the AO noticed that the assessee had filed original return of income u/s.139(1) of the Act on 26.12.2012 of Rs. 6,36,260/- and later on he filed return in pursuant to the notice u/s.153A declaring total income of Rs. 18,52,981/-. The assessee was running and managing nursing home in the name and style of M/s Jena & Jena Nursing Home at Talcher, Odisha. The predominant....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aggrieved with the penalty order, the assessee preferred appeals before the CIT(A), however, the CIT(A) after considering the submissions of the assessee and findings of AO, upheld the penalty so levied by the AO u/s.271A of the Act for all the assessment years under consideration. 6. Further feeling aggrieved with the order of CIT(A), the assessee is in appeals before the Income Tax Appellate Tribunal. 7. Ld. AR before us submitted that the penalty is not imposable in case of the assessee for the six assessment years as there is no notice u/s.139(9)/139(9)(f) issued by the AO before levying penalty. Ld.AR also filed written submissions which read as under :- "That on 03/09/2019, there was a search and seizure u/s. 132 of the I.T. Act both in the residence as well as business premises namely Jena & Jena Nursing Home situated in the name of Appellant at Talcher in the District of Anugul. In course of such search operation no books of accounts or any of the documents were impounded except for the AY 2014-2015 to 2016-2017; The assessment was completed based on appraisal report submitted by the Deputy Director of Investigation, Bhubaneswar. Af....
X X X X Extracts X X X X
X X X X Extracts X X X X
....urn was submitted in pursuance of notice u/s.153 (A) of the I.T. Act by disclosing the higher income. The learned CIT (A)' failed to take note of the law that without issuing the statutory notice u/s. 139 (9) of the I.T. Act, the Learned AO is bereft of jurisdiction and authority to impose penalty; In the above back ground and back drop of the matter, the appellant preferred the instant appeal before this Hon'ble Tribunal; among other grounds on the grounds that the decision maker has not understood the law correctly that regulars his decision making power and that the decision of the decision maker is vitiated by illegality and irrationality. BECAUSE, as per section 139 (9) (F) where regular books of accounts are not maintained by the assessee, the returned is accompanied by a statement indicating the amounts of turn over or as the case may be, gross receipts, gross profits, expenses and net profit or business or profession on the basis of which such amount has been computed and also disclosing the amount of to5tal sundry creditors stock in trade and cash balance as at the end of the previous year. In the instant case the learned AO failed to und....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on-maintenance of books of accounts. However, as per the provisions of Section 271A of the Act, If any person fails to keep and maintain any such books of account and other documents as required by section 44AA of the Act 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. The relevant provisions of Section 271A of the Act read as under :- "Failure to keep, maintain or retain books of account, documents, etc" 271A. Without prejudice to the provisions of [section 270A or] 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]. 10. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uch 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 on business or profession [not being a profession referred to in sub-section (1)] shall,- (i) if his income from business or profession exceeds one lakh twenty thousand rupees or his total sales, turnover or gross receipts, as the case may be, in business or profession exceed or exceeds ten lakh rupees in any one of the three years immediately preceding the previous year; or (ii) where the business or profession is newly set up in any previous year, if his income from business or profession is likely to exceed one lakh twenty thousand rupees or his total sales, turnover or gross receipts, as the case may be, in business or profession are or is likely to exceed ten lakh rupees, during such previous year; or (iii) where the profits and gains from the business are deemed to be the profits and gains of the assessee under section 44AE or section 44BB or section 44BBB, as the case may be, and the assessee has claimed his income to be lower than the profits or gains so deemed to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....before him. The main source of income of the assessee is from the consultancy/services from the treatment of patients which was being given by the doctors/professionals/technicians etc. The predominant source of income was from medical profession. During the course of search and seizure operation various incriminating documents were found. The relevant portion from the assessment order is as under :- "5. In the return of income for this year, assessee has disclosed gross receipts of Rs. 40,04,880/-. She has disclosed profit of Rs. 5,11,708/- on such receipts u/s 44AD of the Act. Before discussing the eligibility of expenses claimed, the issue of gross receipts needs to be discussed in relation to findings in the course of search at her premises. During the course of search, several registers and documents were found and seized. These were given mark of identification in the series - J & J. The relevant among all these were those marked in this series as 1,3,4,7, 8,9,10,11 and 15. During the course of search and post search investigation, these were reported to be as under:- i. 1 & 3 --- OPD register, i.e. register containing details of OPD patients, ii....