Case Law Details
Bandenawaz Mulla Vs ACIT (ITAT Bangalore)
Introduction: The case involves Bandenawaz Mulla, who filed a return of income for Assessment Year 2017-18 without maintaining books of account. The assessing officer (AO) imposed a penalty under section 271B of the Income Tax Act for the assessee’s failure to get the books audited. The case was appealed to the Income Tax Appellate Tribunal (ITAT) Bangalore.
Analysis: The ITAT Bangalore considered the fact that the assessee had not maintained books of account, making it unnecessary to conduct an audit under section 44AB of the Income Tax Act. The ITAT concluded that since there were no books of account to audit, there was no basis for imposing a penalty under section 271B for failure to get the books audited. The ITAT referred to the judgment of the Allahabad High Court in CIT vs. S.K. Gupta & Company, which supported their view.
Conclusion: The ITAT Bangalore allowed the appeal filed by Bandenawaz Mulla and deleted the penalty imposed under section 271B of the Income Tax Act. The ITAT held that when an assessee does not maintain books of account, there is no requirement for an audit under section 44AB, and therefore, no penalty can be levied under section 271B for failure to get the books audited. The decision is in line with the judgment of the Allahabad High Court in CIT vs. S.K. Gupta & Company.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
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If the Contract Receipts are of Rs 12,80,43,795/- vide Section 44AB on turnover basis, assessee needs to gets his accounts audited, then why penalty cannot be charged by the assessee. Please explain
The ITO could have imposed penalty U/s 271A for not maintaining bóoks of accounts. ITO erred in imposing the penalty u/s 271B.