TaxTMI 
TaxTMI 
TaxTMI 
2023 (5) TMI 704
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....oks of accounts and on estimation of net profit. The assessee, admittedly, was required to get his books of account audited as required u/s 44AB of the Act and on account of failure to do so, the Assessing Officer levied penalty u/s 271B of the Act which has been confirmed by the CIT(A). 3. Now, the contention of the ld. Counsel for the assessee is that where the assessee did not maintain books of account, the penalty u/s 271B could not be levied for failure of the assessee to get books of account audited as the question of audit of books of account does not arise where the books of accounts have not been maintained at all. The ld. Counsel for the assessee in this respect has relied upon the decision of the Hon'ble Allahabad High Court in the case of CIT vs. Bisauli Tractors reported in (2007) 165 taxman 0001. 4. We have gone through the order of the ITAT, Ranchi Bench, in the own case of the assessee in respect of quantum appeal for the year under consideration. We find that the assessee has not presented the true and correct facts. A perusal of para 5 of the order of ITAT dated 07.06.2019 (supra) would show that the Tribunal has categorically noted, "The A.O considering th....
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....ins so deemed to be the profits and gains of his business and his income exceeds the maximum amount which is not chargeable to income-tax during such previous year,] keep and maintain such books of account and other documents as may enable the 15[Assessing] Officer to compute his total income in accordance with the provisions of this Act. (3) The Board may, having regard to the nature of the business or profession carried on by any class of persons, prescribe16, by rules, the books of account and other documents (including inventories, wherever necessary) to be kept and maintained under sub-section (1) or sub-section (2), the particulars to be contained therein and the form and the manner in which and the place at which they shall be kept and maintained. (4) Without prejudice to the provisions of sub-section (3), the Board may prescribe, by rules, the period for which the books of account and other documents to be kept and maintained under sub-section (1) or sub-section (2) shall be retained.]" "44AB. Every person,- (a) carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds one crore rupees in any prev....
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....d from the 1st day of April, 1985 or, as the case may be, the date on which the relevant section came into force, whichever is later : Provided also that in a case where such person is required by or under any other law to get his accounts audited, it shall be sufficient compliance with the provisions of this section if such person gets the accounts of such business or profession audited under such law before the specified date and furnishes by that date the report of the audit as required under such other law and a further report by an accountant in the form prescribed under this section. Explanation.-For the purposes of this section,- (i) "accountant" shall have the same meaning as in the Explanation below sub-section (2) of section 288; (ii) "specified date", in relation to the accounts of the assessee of the previous year relevant to an assessment year, means 91[date one month prior to] the due date for furnishing the return of income under sub-section (1) of section 139." 6. As per Section 44AA of the Act, the maintenance of books has been made compulsory in respect of persons carrying out certain profession and as mentioned above and further in cases of persons or bu....
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....firstly, maintaining their books of account and secondly get their books of account audited. Whereas the persons with lesser receipts or turnover have been given single responsibility of maintaining their books of accounts. Under the circumstances, the persons with lesser responsibility have been subjected to lesser penalty for non-compliance of the statutory requirement. However, the persons having higher turnover have been given the responsibility of also get their books of account audited and are subjected to higher penalty. In our humble view, the persons who have been given double responsibility of maintaining books of account and audit of the accounts are liable to be subjected to penalty on both counts and they cannot be equated with the persons given single/lesser responsibility for their own wrongful act or omission. This can be explained by an example. Suppose there are two persons namely Ram & Shyam. Both are required to maintain their books of accounts and also get those audited as required u/s 44AA and 44AB. Ram maintains his books of account but did not get those audited, whereas, Shyam did not maintain his book of accounts at all and there was no question of audit of....
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....f account books by the assessee and not for its failure to have its accounts audited under section 44AB. That is why he firstly issued notice dated 11-11-1987 under section 271A and passed the final penalty order on 28-12-1988. He did not record default of non-audit of accounts in his order and, consequently, his direction for initiation of penalty proceedings contained in his assessment order would not cover his second notice dated 11-9-1989 issued under section 271B. The second notice, accordingly, cannot be held time-barred by reckoning the limitation period from 30-3-1987 and expirable on 3-8-1989. 8. It remains to be seen whether proceedings under section 271B were necessarily required to be initiated in the assessment proceedings of the relevant assessment year. But as it is, the defaults contemplated by section 271A and section 271B are separate and distinct. Under the latter provision if the assessee fails to get his accounts audited under section 44AB, he is liable to penalty as laid down in this section. The object is to get a clear picture of the assessee's accounts whose turnover exceeds the prescribed limit. The rates envisaging two types of defaults are also dif....