TaxTMI 
TaxTMI 
TaxTMI 
2022 (10) TMI 944
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....of Section 44AB of the Act. The A.O. issued a show cause notice for levying penalty u/s. 271B. The assessee submitted that the A.O. himself has accepted the assessee has derived commission income of 2% from M/s. Flamingo Infra Pvt. Ltd. worth of Rs. 75,15,450/- and the assessee is providing huge accommodation entries and earned 2% commission on such transaction. Though the Assessing Officer has not accepted the explanation, however levied penalty of Rs. 1,50,000/- u/s. 271B of the Act. 3. Aggrieved against the same, the assessee filed an appeal before Ld. Commissioner of Income Tax(Appeals)-3, Rajkot. The assessee submitted before the Ld. CIT(A), the assessee was a semi whole seller in confectionery and biscuits. Regular books of accounts were maintained which have been confirmed by the A.O. as well. As per books of accounts, the assessee's turnover was Rs. 40,88,466/-. During the course of assessment proceedings, it was found that the assessee involved in providing accommodation entries on commission of 2% without making any real transaction of purchase or sales. The assessee in order to avoid long term litigation and to buy peace of mind, accepted the unaccounted income of Rs. 7....
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....aking into account the undisclosed cash deposit found in the ICICI bank a/c. The income disclosed in the revised financial statement during the course of scrutiny assessment was not disclosed in the regular books of accounts. It is also undisputed fact that assessee has not maintained account in its books of accounts pertaining to share transactions carried out during the year under consideration. He has also not disclosed jot work income in the books of accounts. After considering the above facts and circumstances, we observe that separate penalty has been provided as per the provisions of section 271A for failure to keep, maintain or retain books of account, documents, etc. as required by section 44AA of the act. In view of the above, the assessee has violated the provision of section 44AA by not maintaining books of accounts and the assessing officer has not initiated any penalty as prescribed u/s. 271A of the act. We observe that section 271B is not attracted in a case where no account has been maintained and instead a recourse u/s. 271A can be taken. Therefore, we consider that in the case of the assessee the imposition of penalty u/s. 271B is not justified. Accordingly, the a....
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.... under section 44AD of the Act and thereafter, taking into consideration the declared turnover of Rs48,98,269 and undisclosed business receipts of Rs43,34,064, had come to a position that the assessee has failed to get offered his books of accounted, that in a such a scenario, the contention of the Revenue could have been accepted. Further, what has been referred in section 44AB is the books of accounts maintained in the regular course of business and where an admission is made by the assessee based on third party statement during the course of survey that the amount found deposited in the bank account belongs to the assessee, it cannot be said that regular books of accounts are maintained even in respect of unaccounted sales or business receipts and the penalty can be levied under section 271B of the Act. In this regard, we refer to the decision of the Coordinate Bench in case of Brij Lal Goyal vs. ACIT (supra) wherein it has been held as under: "----11. It is evident from the aforesaid observation that books of account maintained in regular course only make the assessee eligible for grant of immunity from penalty and not with reference to any of such books, which have not been ....
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....stituted by the material gathered by the Assessing Officer in the course of some survey in the case of third party though the said material may be relevant evidence for making the addition to the income of the assessee. Hence, in view of the facts and circumstances and following the earlier decision of this Tribunal, the penalty levied U/s 271B of the Act is deleted." 4.4. Thus the Ld. Counsel pleaded there is no justification of levying penalty u/s. 271B of the Act and requested to delete the same and allow the assessee appeal. 5. Per contra the Ld. D.R. appearing for the Revenue supported the order of the Lower Authorities and pleaded to confirm the levy of penalty u/s. 271B of the Act. 6. We have heard both sides arguments and perused the materials available on record including the Paper Book and case laws filed by the assessee. The consistent stand of the assessee is that his business turnover is below sixty lakhs and no question of Audit Report u/s. 44AB of the Act and consequently penalty cannot be levied u/s. 271B of the Act. Further it is seen from the assessment order, unaccounted commission income at 2% by providing accommodation entries were found during the assessmen....