Yamuna Expressway Industrial Development Authority Vs CIT(Appeal) (ITAT Delhi)
When assessee is a Local Authority/Charitable Institution not carrying on business even AO levied penalty u/s 271A for no books, audit u/s 44AB cannot be enforced
Yamuna Expressway Industrial Development Authority is a statutory Local Authority constituted u/s 3 of the UP Industrial Area Development Act, 1976, engaged in public infrastructure & area development. It was granted registration u/s 12AA on 08.05.2017 & later notified u/s 10(46) for AYs 2014-15 to 2018-19. For AY 2006-07, assessment was reopened & completed u/s 147/143(3), treating surplus as business income & disallowing certain expenses.
AO initiated penalty both u/s 271A (for non-maintenance of books) & u/s 271B (for failure to get accounts audited u/s 44AB), & levied penalty of ₹24,464 @0.5% of gross receipts u/s 271B.
CIT(A) confirmed the penalty. Before Tribunal, Assessee argued that it is not engaged in any business or profession, but is a statutory development authority carrying out public utility functions. Therefore, Section 44AA (maintenance of books) & Section 44AB (tax audit) do not apply. In fact, AO himself levied penalty u/s 271A holding that no books were maintained. If no books exist, there is nothing to audit, so 271B penalty cannot survive.
