TaxTMI 
TaxTMI 
2025 (4) TMI 2222
X X X X Extracts X X X X
X X X X Extracts X X X X
....- "The following Grounds of Appeal are without prejudice to one another:- 1. On the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) (National Faceless Appeal Centre) erred in confirming the action of NFAC in imposing Penalty of INR 1,50,000/- u/s 271B of the act, without considering the appellants submission. 2. On the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) (National Faceless Appeal Centre) erred in ignoring the case laws quoted by the appellant which are of Higher Fora and applicable to the appellants case. 3. On the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d by the assessee to Rs. 3,14,43,447/- as against Rs. 5,72,498/- shown in the original return of income. However, the income returned was declared at Rs. 1,72,618/- in the revised return as against Rs. 97,310/- declared in the original return of income. The AO called on the assessee to furnish various details from time to time and after perusing the details furnished the AO completed the assessment by making an addition of Rs. 3,07,56,388/- towards bogus purchases. The AO also initiated penalty proceeding under section 271B for failure to get account audited. 3. The AO subsequently issued a penalty notice under section 271B of the Act and issued show-cause notice dated 22.12.2017. In response, the assessee submitted that "With r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erson or the assessee, as the case may be for failure to get his books of accounts audited u/s 44AB, if he proves that there was reasonable cause for the said failure. A plain reading of section 271B makes it clear that section 271B maintains imposition of penalty on the failure but such imposition of penalty is dependent on the proof that there was no reasonable cause for the failure. I therefore submit that due to above mentioned/stated reasons I failed to gets books of accounts audited as per section 44AB of the act. There was reasonable cause for the said failure as explained above. Therefore I request you to not to initiate any penalty u/s 271B of the income tax act, 1961 for reasons stated above. Kindly ackn....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ished the business and helped me to earn my livelihood; however, he expired in an accident while travelling in local train years back and his untimely demise caused me immense difficulties to earn my livelihood and meeting my family's expenses. I am handicapped and not so educated or well versed with any laws or taxes else instead to be dependent on Mr. Hardik Mehta for my livelihood, I myself would have started some business or joined some job for the bread & butter for my family. I further submit that as a law abiding citizen I paid taxes as per average margin as soon as I received the notice. Even though I am handicapped, I am the only earning member in my family. My family consists of my dependent wife who is house wife and....
X X X X Extracts X X X X
X X X X Extracts X X X X
....u/s 271B of the income tax act, 1961 as there was reasonable cause and circumstances beyond applicant's control for the said failure as explained above considering section 273B of the act." 7. We heard the ld DR and perused the material on record. The AO reopened the assessment for the reason that the turnover of the assessee as declared in the return of income is very less considering that the assessee is the proprietor of many concerns the turnover of which is substantial. The assessee while filing the return of income has revised the turnover to Rs. 3,14,43,447/- as against Rs. 5,72,498/- shown in the original return of income and that the assessee has not got the accounts audited. Accordingly the AO has initiated the penalty proc....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... was a reasonable clause for failure to get the accounts audited under section 44AB of the Act.. In the context of the penalty provisions including the provisions of Section 271B, the word "reasonable cause" would mean a cause which prevents a reasonable man of ordinary prudence acting under normal circumstances, without negligence or inaction or lack of bona fide. In the light of the above legal position we will now look at the assessee's case. The contention of the assessee is that the his partner / friend Mr.Hardik Mehta was the one who was handling the business affairs including the regulatory compliance etc., and the sudden untimely demise of Mr.Hardik Mehta in an accident caused immense difficulties which led to noncompliance of t....