Ved Singh Vs ITO (ITAT Delhi)
In the case of Ved Singh vs. ITO (ITAT Delhi), the taxpayer Ved Singh challenged a penalty levied under Section 271B of the Income-tax Act, 1961, amounting to ₹1,09,807 for the assessment year 2017-18. The penalty was initially imposed by the Assessing Officer (AO) due to Singh’s failure to get his accounts audited under Section 44AB, as his bank account showed cash deposits exceeding ₹1 crore. Singh argued that he was a commission agent for Mother Dairy, earning only commission income amounting to ₹3,24,558, and the deposited amount represented sales on behalf of Mother Dairy, not his personal turnover. The Commissioner of Income Tax (Appeals) upheld the penalty, stating that the transactions required a tax audit. However, ITAT Delhi, upon review, found Singh’s explanation reasonable. They noted that Singh operated under the belief that the turnover belonged to Mother Dairy and, therefore, did not require a tax audit. ITAT accepted Singh’s bonafide interpretation and overturned the penalty, acknowledging his income’s nature and the circumstances. This decision highlights the importance of understanding an assessee’s intent and income structure in determining tax audit obligations under Section 44AB, especially for commission agents.
FULL TEXT OF THE ORDER OF ITAT DELHI
