2026 (2) TMI 1375

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....enalty levied of Rs. 1,50,000/- under section 271B of the Income Tax Act the non-compliance of the provision of section 44AB of the Income Tax Act and therefore the ld. AO be directed to delete the said penalty in full. 2. That your appellant craves a leave to add, alter or amend any grounds at the time of hearing." 3. The assessee is an individual and filed return of income for assessment year 2022-23 declaring a taxable income to Rs. 5,56,610/- under the head income from profits and gains from business and profession. The case of the assessee was selected for scrutiny for the reason that 'large turnover but books of accounts not audited u/s. 44AB' and on the issues of '44AB audit compliances'. Notice u/s. 144B of the Act dated....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....uired under sub-section (2) of section 44AA and get them audited and furnished a report of such audit as required u/s. 44AB of the Act. Thus, the Assessing Officer imposed the penalty u/s. 271B being 0.25% of the total sales turnover over or gross receipt of the business and profession subject to maximum of Rs. 1,50,000/-. 4. The assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The Ld. A.R. submitted that the Assessing Officer has failed to consider the applicability of the proviso to Section 44AB, which increases the threshold for mandatory audit to 10 crore if cash receipts and cash payments during the year are less than 5% of the total receipts and payments. In the present case: Cash r....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....9.05 Crores and the cash transaction of receipts and payments are within the limit of 5%. The amount cash transaction has been certified by a CA after verification of books of accounts and for applicability of tax audit itself. That the CA certificate dated 29.5.2024, for the transactions of cash within limit of 5% cannot be treated as afterthought, as it has been submitted during the course of the penalty proceeding itself and further as per the settled legal position, CA certificate cannot be thrown out, if not particular defect has been pointed out therein and further it has been issued after verification of the books of accounts. That the learned AO has applied section 44AB(e) of the Act, which is application to the audit for presumptiv....