Case Law Details
Santosh Swarupchand Vs ITO (ITAT Pune)
In the case of Santosh Swarupchand vs. ITO, it was established that the assessee had maintained books of accounts for the relevant year. However, the assessee claimed that the books were given to an accountant, Mr. Mahesh Kadam, who was unable to complete the accounting. The affidavit provided by Mr. Kadam, which was submitted after the assessment proceedings, indicated that he was not a qualified Chartered Accountant. According to Section 288 of the Income Tax Act, only a qualified Chartered Accountant is permitted to audit books of account. As a result, the ITAT Pune had to consider whether there was a valid reason for the assessee’s failure to file an audit report.
Analysis: The ITAT Pune determined that the claims made in Mr. Kadam’s affidavit were contradictory and not reliable. The affidavit stated that Mr. Kadam did not provide data to a Chartered Accountant, but for an audit, books of account are required. Since Mr. Kadam’s exact qualification as an accountant was unknown, and he did not meet the definition of an accountant under Section 288, the ITAT concluded that there was no valid reason for the assessee’s failure to file an audit report. As a result, the penalty imposed under Section 271B of the Income Tax Act was upheld.
Conclusion: The ITAT Pune’s decision in the case of Santosh Swarupchand vs. ITO affirms the penalty under Section 271B for the assessee’s failure to file an audit report. The contradictory claims in the affidavit provided by the accountant, Mr. Mahesh Kadam, and his lack of qualification as a Chartered Accountant raised doubts about the reliability of the information. The ITAT concluded that there was no valid reason for the failure to file the audit report, emphasizing the importance of compliance with the requirements outlined in the Income Tax Act.
FULL TEXT OF THE ORDER OF ITAT PUNE
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