Case Law Details
Kartick Das Bairagya Vs ITO (ITAT Kolkata)
The case of Kartick Das Bairagya Vs ITO, brought before the Income Tax Appellate Tribunal (ITAT) Kolkata, provides significant insights into the implications of Section 271B of the Income Tax Act. The case demonstrates how reasonable cause for failing to furnish an audit record can result in no penalty under this section.
The appellant, engaged in the retail business of building materials on a commission basis, was penalised Rs. 1,50,000/- under section 271B for failing to audit and furnish a report as per section 44AB of the Act. This happened due to a loss incurred from share transactions, which brought the income from share trading below 8% of the total turnover.
Kartick Das Bairagya claimed he was unaware of these share dealings performed by the broker, making him unable to ascertain the loss and the necessity for auditing. Moreover, the appellant argued that the assessing officer did not provide sufficient time to audit the share dealings and prepare a report.
During the ITAT proceedings, the assessee provided an affidavit explaining the reasons for not getting the accounts audited, arguing that the impugned year was the first time his turnover exceeded Rs. 1 Cr. due to share dealings, for which he was unaware of the requirement to get audited as per Section 44AB.
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