Bhaveshbhai Haribhai Kanani Vs ITO (ITAT Rajkot)
ITAT Rajkot held that imposition of penalty u/s. 271B of the Income Tax Act for not getting books of accounts audited cannot be sustained since assessee has filed return u/s. 44AD and there is no need to maintain books of accounts u/s. 44AD.
Facts- The assessee is engaged in the business of trading of “brass scrap”. On verification, it was seen that the assessee has declared the turnover of Rs.1,03,43,628/- and offered Net profit at Rs.7,91,012/- as his income. The income declared in the return on the admitted turnover works out at 7.65%.
During the scrutiny, AO noticed more turnover of Rs.11,93,30,453/- and since the assessee has declared the income under “no account case” u/s 44AD of the Act in the return of income filed. Further, the assessee has not complied with the provisions of section 44AB of the Act, to get his accounts audited, as required u/s 44AB of the Act. Finally, AO estimated the income of the assessee at 4% of the total turnover of Rs.11,93,30,453/- which worked out to Rs.44,73,218/-. Further it was noted that the assessee has not furnished an audit report in Form 3CA, as required u/s. 44AB within the stipulated due date. Therefore, penalty proceedings u/s 271B of the Act was initiated and penalty of Rs.1,50,000 was imposed. CIT(A) dismissed the appeal. Being aggrieved, the present appeal is filed.
