Hiraben Rajuhai Bokhiriya Vs ITO (ITAT Rajkot)
26AS Reflection Not Equal to Turnover – Commission Agent in Transport Business Practice Explained—Audit Not Mandatory for Mere Pass-Through Receipts- Penalty u/s 271B Deleted
Assessee, engaged in arranging trucks, declared income of ₹3,78,830. AO noted gross receipts of ₹1,11,60,365 in 26AS, treated the figure as turnover exceeding the 44AB limit & levied maximum penalty of ₹1,50,000 u/s 271B for failure to furnish audit report. Assessee explained that she was only a commission agent: entire freight received from customers was passed on to vehicle owners & she retained only a fixed commission per consignment. CIT(A) upheld AO’s view, holding that the 26AS amount represented turnover.
Before Tribunal, Assessee argued that 26AS entries represented pass-through receipts common in transport business & not her turnover; only commission income constituted gross receipts for 44AB purposes. Tribunal observed that Assessee consistently maintained commission-agent status, & mere reflection of amounts in 26AS did not convert pass-through payments into turnover. Since only commission income was earned & it was below the audit threshold, provisions of 44AB did not apply. Consequently, penalty u/s 271B could not survive.
FULL TEXT OF THE ORDER OF ITAT RAJKOT
Captioned appeal filed by the assessee, pertaining to Assessment Year 2016-17, is directed against the order passed under section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) by National Faceless Appeal Centre (NFAC), Delhi/Commissioner of Income-tax (Appeals), dated 18.03.2025, which in turn arises out of a penalty order passed by Assessing Officer u/s 271B of the Act, on 23.05.2019.
