Case Law Details
Taranjeet Singh Alagh Vs ITO (ITAT Delhi)
In the case of Taranjeet Singh Alagh vs ITO (ITAT Delhi), a significant decision was made regarding the implications of non-maintenance of books of accounts on account audits. The case became pivotal in understanding and interpreting the penalties under section 271B of the Income Tax Act. This article offers a detailed analysis of the case and its impact.
The Income Tax Appellate Tribunal (ITAT) Delhi, in the case, provided an important clarification on penalties under section 271B. The case revolved around the issue of whether a penalty could be imposed for non-compliance with audit requirements in the absence of maintained books of accounts.
In the judgement, the ITAT Delhi ruled that if an assessee is not guilty of non-maintenance of books of accounts, the presumption would be that the assessee is not required to maintain them. Consequently, imposing a penalty for non-auditing of books of accounts was deemed unjustified.
This ruling challenged the prevalent notion of simultaneous penalties for non-maintenance and non-auditing of books. Instead, it highlighted the importance of the context in which the non-compliance occurs, suggesting that the lack of requirement to maintain books effectively invalidates the need for their audit, thus nullifying the penalty under section 271B.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
