2025 (12) TMI 1288

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..... CIT (A) confirming the order of ld. AO, wherein the ld. AO has imposed penalty u/s 271A of the Income-tax Act, 1961 (the Act). 2.1. The facts in brief are that the assessment was framed u/s 143(3) vide order dated 12.04.2021. In the assessment order the ld. AO initiated the proceedings u/s 270A sub section 1 of the Act on the ground that the assessee has not furnished the records and therefore, the ld. AO was not satisfied with the correctness and completeness of the accounts. Accordingly, the books of accounts were rejected u/s 145(3) of the Act and the income of the assessee was estimated at the rate of 18% of the total turnover. Pertinent to note that the assessee has furnished all the information required by the ld. AO during the a....

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.... nonetheless, there may be being shortcomings in the books of account. The case of the assessee find support from the decision of Third Member decision in case of ACIT Vs. Aggarwal Construction Co. (2007) 106 ITD 129 (Chandigarh) dated 29.01.2007, wherein it has been held as under:- "15. I have reproduced the above extract from the assessment order to reject the finding recorded by the Assessing Officer in the penalty order, that no books of account were maintained by the assessee as baseless. It is not recorded in the assessment order that the Assessing Officer was 'unable' to compute the income of the assessee from ledger type of book maintained by the assessee. The Assessing Officer has admitted that income and expenditure were ....

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....argued that statute has provi-ded a rate which is not reasonable. Further, having regard to provi-sions of section 44AD, which is overriding, it is not possible for the revenue to argue that profit computed as per the section is not profit computed 'in accordance with provisions of this Act' or that the Legislature was unaware of provisions of sections 68, 69, 269SS, 269T, 140(3) etc. in the enactment of section 44AD. Thus reading entire scheme of the Act one has to hold that profit computed as per section 44AD of the Act by application of flat rate is one recognized method of computation of total income, or part of total income. The fact that the above provisions is applicable only to cases where gross contract receipts are below Rs. 40 la....