Smt. Mukti Roy Vs I.T.O. Ward- 2(4) (ITAT Kolkata)
This case concerns an appeal by Smt. Mukti Roy against the order of the Ld. CIT(A)-Burdwan for the assessment year 2010-11, specifically challenging the confirmation of a penalty totaling Rs.1,50,000/- levied under Sections 271A and 271B of the Income-tax Act, 1961. The dispute arose after the Assessing Officer (AO), following a Section 133(6) notice to the National Stock Exchange (NSE), found that the assessee had engaged in substantial transactions of shares and securities with a total sale value of approximately Rs.23.09 crores. The assessee had not filed a return of income despite a Section 148 notice. The AO treated the resulting loss of Rs.1,96,168.49 as a speculation loss and, while completing the assessment, levied a penalty of Rs.1,50,000/- under Section 271B for failing to get accounts audited as required by Section 44AB. On appeal, the Ld. CIT(A) upheld the penalty and additionally confirmed a penalty under Section 271A.
The Income Tax Appellate Tribunal (ITAT), Kolkata, examined the application of both Section 271A (penalty for failure to maintain books of account) and Section 271B (penalty for failure to get accounts audited). The Tribunal noted a crucial finding by the AO in the original assessment order—that the assessee was not maintaining any books of account. The ITAT referred to precedents, including the Delhi Tribunal’s ruling in Nirmal Kumar Jain Vs. ITO and judgments from the Hon’ble Gauhati and Allahabad High Courts, which established a principle regarding the interaction of these penalty provisions. Specifically, the case law states that where an assessee fails to maintain books of account, only the penalty for non-maintenance under Section 271A can be levied. The requirement to get accounts audited under Section 44AB, and consequently the penalty under Section 271B for non-compliance, only arises where books of account are maintained.
