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Case Law Details

Case Name : Anunoy Mukherjee Vs ITO (ITAT Kolkata)
Appeal Number : I.T.A. No. 555/Kol/2022
Date of Judgement/Order : 23/02/2023
Related Assessment Year : 2017-2018

Anunoy Mukherjee Vs ITO (ITAT Kolkata)

Assessee is an individual and is engaged in the business of mobile recharging and earns income from commission from sale of such recharge coupons of Idea Cellular. Tax at source is deducted u/s 194C of the Act by the employer i.e., M/s. Ideal Cellular on the commission income on recharge coupons sold by the assessee. Income of Rs.4,21,640/- declared in the return filed for Assessment Year 2017-18 claiming TDS of 30,896/-. The case selected for limited scrutiny through CASS for the reason of cash deposit during the year. During the course of assessment proceedings, the ld. Assessing Officer on going through the details of bank account held by the assessee with HDFC Bank observed that cash of Rs.1,48,19,170/- was deposited. So far as the issue under consideration regarding penalty levied u/s 271B of the Act is concerned, the ld. Assessing Officer noticed that the books of accounts have not been audited u/s 44AB of the Act. The ld. Assessing Officer took basis of cash deposited in the bank account treating it as sales turnover. Before us, it is stated by the ld. Counsel for the assessee that the assessee was under the impression that as income is only from commission and the deposit of cash on receipt from various persons for sale of recharge coupons is not its sales but is amount collected on behalf of Telecom company. Further it is submitted that it was the first year of its business.

ITAT find force in the contention of the ld. Counsel for the assessee and considering the fact that assessee is receiving commission income and tax is deducted at source by the Telecom company treating the cash deposits as amount collected on behalf of the Telecom company from various customers and deposited in the bank account and commission on such deposits is given by the Telecom company. The reasons cited by the ld. Counsel for the assessee prima facie found to be reasonable because the assessee was under bonafide belief that he was not liable to get the books of accounts audited as the commission income was below the threshold limit and this was the first year of the business venture taken up by the assessee and thus assessee’s case is covered u/s 273B of the Act.

The provisions of Section 273B of the Act, squarely applies and since the assessee has a reasonable cause for not getting the books of account audited, he should not be visited by penalty u/s 271B of the Act.

FULL TEXT OF THE ORDER OF ITAT KOLKATA

The present appeal is directed at the instance of the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter the “ld. CIT(A)”) dated 21/07/2022, passed u/s 250 of the Income Tax Act, 1961 (‘the Act’), for Assessment Year 2017-18.

2. The Registry has pointed out that there is a delay of one (1) day in filing of this appeal in time before the Tribunal. The assessee has filed a petition for condonation of delay stating the reasons of delay. After perusing the same, we find that the assessee was prevented by sufficient cause from filing the appeal in time before the Tribunal. Hence, the delay is condoned and the appeal is admitted.

3. The only issue that arises for our consideration is whether the ld. CIT(A) was justified in confirming the penalty u/s 271B of the Act at 1,36,214/-, levied for not getting the books of account audited u/s 44AB of the Act.

4. We have heard rival contention and perused the material available on

5. We notice that the assessee is an individual and is engaged in the business of mobile recharging and earns income from commission from sale of such recharge coupons of Idea Cellular. Tax at source is deducted u/s 194C of the Act by the employer i.e., M/s. Ideal Cellular on the commission income on recharge coupons sold by the assessee. Income of Rs.4,21,640/- declared in the return filed for Assessment Year 2017-18 claiming TDS of 30,896/-. The case selected for limited scrutiny through CASS for the reason of cash deposit during the year. During the course of assessment proceedings, the ld. Assessing Officer on going through the details of bank account held by the assessee with HDFC Bank observed that cash of Rs.1,48,19,170/- was deposited. So far as the issue under consideration regarding penalty levied u/s 271B of the Act is concerned, the ld. Assessing Officer noticed that the books of accounts have not been audited u/s 44AB of the Act. The ld. Assessing Officer took basis of cash deposited in the bank account treating it as sales turnover. Before us, it is stated by the ld. Counsel for the assessee that the assessee was under the impression that as income is only from commission and the deposit of cash on receipt from various persons for sale of recharge coupons is not its sales but is amount collected on behalf of Telecom company. Further it is submitted that it was the first year of its business.

6. We find force in the contention of the ld. Counsel for the assessee and considering the fact that assessee is receiving commission income and tax is deducted at source by the Telecom company treating the cash deposits as amount collected on behalf of the Telecom company from various customers and deposited in the bank account and commission on such deposits is given by the Telecom company. The reasons cited by the ld. Counsel for the assessee prima facie found to be reasonable because the assessee was under bonafide belief that he was not liable to get the books of accounts audited as the commission income was below the threshold limit and this was the first year of the business venture taken up by the assessee and thus assessee’s case is covered u/s 273B of the Act, which reads as under:-

“273B. Notwithstanding anything contained in the provisions of [clause (b) of sub­section (1) of] [ section 271, section 271A, [ section 271AA,] section 271B [section 271BA], [ section 271BB,] section 271C, [ section 271CA,] section 271D, section 271E, [ section 271F, [ section 271FA,] [ section 271FAB,] [ section 271FB,] [ section 271G,]] [ section 271GA,] [ section 271GB,] [ section 271H,] [ section 271-I,] [ section 271J,] clause (c) or clause (d) of sub-section (1) or sub-section (2) of section 272A, sub-section (1) of section 272AA] or [ section 272B or] [sub-section (1) [or sub­section (1A)] of section 272BB or] [sub-section (1) of section 272BBB or] clause (b) of sub-section (1) or clause (b) or clause (c) of sub-section (2) of section 273, no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provisions if he proves that there was reasonable cause for the said failure.]”

8. The provisions of Section 273B of the Act, squarely applies and since the assessee has a reasonable cause for not getting the books of account audited, he should not be visited by penalty u/s 271B of the Act. Hence, we delete the penalty and allow the appeal of the assessee.

9. In the result, appeal of the assessee is allowed. Order pronounced in the Court on 23rd February, 2023 at Kolkata.

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