Case Law Details
Rakesh Kumar Jha Vs ITO (ITAT Ranchi)
Assessee has been running the business of imparting tuition classes. As per the statement of facts furnished by the assessee, assessment was made on estimation basis on account of non-maintenance of books of accounts applying provisions of section 145(3) being 8% of gross receipts u/s 145(3) . Assessee was required to get his books of account audited as required u/s 44AB and on account of failure to do so, the AO levied 271B penalty which was confirmed by CIT(A).
On further appeal, assessee contended that 271B penalty could not be levied for failure to get books of account audited as the question of audit of books of account does not arise where the books of accounts have not been maintained at all. Assessee relied upon the decision of the Hon’ble Allahabad High Court in the case of CIT vs. Bisauli Tractors reported in (2007) 165 taxman 0001.
Tribunal noted that the assessee has not presented the true & correct facts. A.O considering the submissions of the assessee and material placed on record, rejected the books of accounts of assessee estimating income as percentage on gross receipts. Therefore, the case of the assessee is not of maintenance of books of account, rather, the case of the assessee was that of rejection of books of account. Hence the Tribunal held that the decision Bisauli Tractors is not applicable.
It is quite interesting to note the observations of the Tribunal with regard to the levy of 271B penalty where books are not maintained at all. The Tribunal concluded that 44AA and 44AB are separate and distinct provisions & held as under:
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Author Bio
There are a number of decisions holding that once 271A penalty is levied, further penalty u/s271B cant be levied.