Case Law Details
Shanthilal D Jain Vs DCIT (ITAT Chennai)
ITAT Chennai held in the case of Shanthilal D Jain Vs DCIT that Penalty under Section 271B for failure to get account audited not leviable when books of accounts are not maintained.
Facts- ld.CIT-DR relied on the order of CIT(A) and stated that the assessee has not maintained any books of account and the alleged books of account as referred by assessee before AO as well as before CIT(A) is only a hard disk which was seized, but this hard disk, according to ld.CIT-DR, contains incomplete tally package which was recovered during the course of search throwing light on incriminating material in the shape of cash credits, sundry loans and bogus purchases made from various parties. The ld.CIT-DR stated that the ld. counsel for the assessee himself admitted the fact while arguing the appeals relating to penalty u/s.271A & 271B of the Act in regard to various appeals of group cases regarding these two penalties agitated by assessee, the ld.counsel admitted that in these two penalties, the assessee has not maintained the books of account and hence, penalty u/s.271A can be uphold in relation to abated assessments but ld. counsel requested that in regard to unabated assessments, the issue is as regards to assumption of jurisdiction in view of the decision of Hon’ble Bombay High Court in the case of Continental Warehousing Corporation, supra. The ld.CIT-DR contented that the assessee before CIT(A) could not explain the nature of additions made in the relevant assessment years in regard to addition of cash credits, sundry loans and creditors added u/s.68 of the Act and bogus purchases. The ld.counsel for the assessee in reply further reiterated the same arguments.
Conclusion- The Hon’ble Allahabad High Court in the case of CIT vs. S.K. Gupta & Co., (2010) 322 ITR 86, Hon’ble Madhya Pradesh High Court in the case of Bharat Construction Co. vs. ITO, (1999) 153 CTR 414 and Hon’ble Gauhati High Court in the case of Surajmal Parsuram Todi vs. CIT, (1996) 222 ITR 691 has categorically held that once books of account are not maintained and consequently penalty u/s.271A of the Act is levied and confirmed, no penalty u/s.271B of the Act for failure to get the accounts audited u/s.44AB of the Act be levied.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
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