TaxTMI 
TaxTMI 
2026 (8) TMI 1097
X X X X Extracts X X X X
X X X X Extracts X X X X
....d under Section 271B of the Income Tax Act, 1961 [hereinafter "the Act"] for failure to get the books of account audited as required under Section 44AB of the Act. The grounds raised by the assessee are reproduced as under: i. The penalty order passed by the Ld. National Faceless Assessment Centre u/s. 271B of the Act, dated 25.06.2025 is invalid, non-est and bad in law. ii. The Ld. National Faceless Appeal Centre (hereinafter referred to as "the Ld. NFAC") erred in law & facts in confirming the penalty u/s 271B of the Act of Rs. 1,50,000/-without appreciating the provisions of Section 93 of the Finance Act, 2024 which grants immunity from imposition of any penalty on satisfying the provisions of Section 92 of the said Act....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er the Scheme and that penalty under section 271B, being independent of the quantum addition, does not fall within its ambit. Relevant finding of the Ld. CIT(A) is reproduced as under: "5.3 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- The AO held that as per the CBDT guidelines circulated vide circular no. 19 of 2024 which contains Guidance Note 2/2024 on provisions of the Direct Tax Vivad se Vishwas Scheme, it has been clearly mentioned that immunity can only be allowed under VSVS on the issue for....
X X X X Extracts X X X X
X X X X Extracts X X X X
....earned CIT(A) on this issue.. 5. The second contention of the assessee is that the turnover from futures and options transactions has not been computed in accordance with the Guidance Note on Tax Audit issued by the Institute of Chartered Accountants of India and, consequently, the provisions of section 44AB were wrongly invoked. In support thereof, the assessee relied upon the decision of the Coordinate bench of the Tribunal in the case of Sanjay Marotrao Modak v/s Dy. CIT [2023] 147 taxmann.com 221 (Mumbai-Trib). The Tribunal in said case observed that the concept of "turnover" applicable to ordinary trading cannot be mechanically applied to F&O transactions because: (i) there is ordinarily no delivery of shares or securities; (ii) the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lculation of tax for such transaction, the total turnover or gross receipts in the previous year are to be taken into consideration. Section 44AD of the Act prescribes a percentage of such total turnover as gross receipts to be calculated for levying tax. In the common parlance turnover as per Companies Act, 2013 means that aggregate value of the realization amount made from sale, supply or distribution of goods or on account of services rendered or both, by a company during the financial year. This interpretation does not hold good in case of F & O transactions where there are neither physical goods involved nor any delivery of shares or securities involved in the said transaction. The entries in the books of accounts of such transactions ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f any statutory provision for computation of turnover in such cases. 12. From the above observation, we find that the validity of the ICAI guidance for calculating the turnover in case of derivatives has been reiterated by various judicial precedence. Upon consideration of the said method of calculating the turnover in transactions related to future and options, the assessee's case does not fall under the provisions of section 44AB of the Act which mandates auditing of books of accounts and furnishing audited statement of accounts. From the above cited decisions, and also decisions of the co-ordinate bench in case of Sachin Maratrao Rangari (supra) on identical issue, we find no merit in the order of Id. CIT(A) and we hereby de....