S. Ramakumar Reddy Vs ACIT (Telangana High Court)
The Telangana High Court has dismissed an appeal filed by S. Ramakumar Reddy, a bookie at Hyderabad Race Club, upholding a penalty of Rs. 1,00,000/- levied under Section 271B of the Income Tax Act, 1961. The penalty was imposed for the assessee’s failure to comply with Section 44AB, which mandates the auditing of accounts for certain turnover thresholds.
The High Court’s decision, delivered on April 8, 2005 (though the appeal was filed in 2005 and notice issued in 2006, the order date is specified as 2005), affirmed the earlier ruling of the Income Tax Appellate Tribunal (ITAT) Hyderabad, finding no error or infirmity in its view and concluding that no substantial question of law arose for consideration.
Case Background
For the Assessment Year 1995-96, S. Ramakumar Reddy filed his income tax return declaring a total income of Rs. 5,82,490/-. However, the Assessing Officer (AO) noted that the assessee had not submitted audited accounts as required by Section 44AB of the Act. Consequently, a penalty of Rs. 1,00,000/- was levied under Section 271B.
The assessee challenged this penalty before the Commissioner of Income Tax (Appeals), but the AO’s order was affirmed. A further appeal was then filed before the ITAT.
