TaxTMI 
TaxTMI 
TaxTMI 
2023 (8) TMI 713
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....bad in law and on facts. 4. The appellant reserves the right to add, alter, amend or omit all or any of the grounds of appeal. 2. Brief facts of the case are that the assessee is an Association of Persons constituted by Shri Vijendra Singh, Shri Vinod Patel and Shri Ravi Shrivas. In this case, assessment for the assessment year 2011-12 was made under section 147 of the Income Tax Act, 1961, read with section 143(3) of the Income Tax Act, 1961, on 31/03/2015. During the course of the assessment proceedings, penalty proceedings under section 271B of the Income Tax Act, 1961, read with section 274 of the Income Tax Act, 1961 has been initiated and accordingly show cause notice under section 271B of the Income Tax Act, 1961 was issued on 31/03/2015 and served upon the assessee. The AO noticed that the assessee has failed to furnish the return of income for the Assessment year 2011-12 as required under section 139 of the Income Tax Act, 1961. He noted that there were reasons to believe that income chargeable to tax has escaped assessment within the meaning of section 147 of the Income-tax Act, 1961. For failure on the part of the assessee to furnish return of income for the above a....
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....was not required to get Audit of the Books of Account and obtain audit Report u/s 44AB of the Act. As per provisions of sec. 44AB as applicable to relevant assessment year an assessee is required to get audit of its books of account if the sales, turnover or gross receipts exceed Rs. 40 lakhs in the relevant previous year. In this case since the appellant did not recognize any sales revenue, audit was not conducted. 2.3. Facts being as above, appellant did not file Ra!. As per agreement with M/s Koyala Karmachari appellant received Rs. 1,46,44,225/- therefore he was liable to maintain books' of accounts and get these audited. However no books of accounts were maintained and no audit was done. Therefore the AO levies penalty u/s 271B. The profit of assessee's business will depend when the assessee will closed his books as per payment completion method. However so far as turnover of business is concerned, there is no doubt that Rs. 1,46,44,225/- was received during the year on sale of 10.13 acres of land. Therefore assessee was liable to maintain books of accounts and get his accounts audited. Having failed in doing so, I find that AO was justified in levying the penalt....
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....e nature of the receipt, and not the profit element therein, that is relevant. As such, the assessee's contention with regard to its exclusion, i.e., as not bearing a profit element, is without merit both on facts and in law. 4.2 So, however, we are nevertheless unable to agree with the Revenue that the assessee is liable to penalty u/s. 271B of the Act. Our reasons for the same are as follows. ITA No.1624/Mum/2011 (A.Y. 2005-06) Esque Finmark Pvt. Ltd. vs. Asst. CIT The word 'gross receipt' is liable to be construed in more than one way; the matter in fact having travelled to the tribunal in the case of B.K. Jhala & Associates (supra) and Gopal Krishan Builders (supra), both at the instance of the Revenue, so that the assessee had succeeded at the first appellate stage. The matter, accordingly, cannot be considered to be without an element of contentiousness associated therewith, so that it is liable to be considered as giving rise to a debatable question, constituting a reasonable cause within the meaning of section 273B of the Act, saving penalty. We say so as the words 'sales', 'turnover' as well as 'gross receipts' give rise to connota....
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....al maxims ejusdem generis and noscitus A Sociis would operate to exclude 'purchases' from forming part of the qualifying criterion. Rather, a provision, for the purpose of levy of penalty, is to be even otherwise strictly construed. It is perhaps for the reason of the same not finding approval of the ld. CIT(A) that she chose not to advert thereto in the impugned order. As explained by the apex court in Hindustan Steel Ltd. vs. State of Orissa [1972] 83 ITR 26 (SC), a penalty, even where the provision stands attracted, may lawfully be not levied where the default is not found to be a result of a conscious disregard by the tax payer of his legal obligations or a conduct contumacious, which is clearly not the case in the instant case. 5. In view of the foregoing, we are of the clear and unambiguous view that the assessee's case, despite a default of s. 44AB of the Act, is not liable in law for penalty u/s. 271B in the facts and circumstances of the case. We, accordingly, direct its deletion. 6. In the result, the assessee's appeal is allowed. b. M/s Shree Balaji Construction, 2020 (2) TMI 77-ITAT Indore following the order of ITAT Mumbai in Exque Finmark P....