Case Law Details
Benchmarrk Realty LLP Vs DCIT (ITAT Pune)
ITAT Pune held that bonafide belief that as there is no sales there is no need of tax audit is not acceptable as Gross receipt of the assessee is more than INR 1 Crore. Accordingly, penalty u/s 271B imposable for default in not getting books audited.
Facts- The assessee had filed ROI electronically for A.Y.2015-16 declaring total income of Rs.33,80,870/-. Assessee was in the business of Builder and developer. During the scrutiny assessment the Assessing Officer (AO) asked the assessee to file copy of Audit report, along with certain other documents. The Assessee replied that No Tax Audit done for the year as there was only Work in Progress (WIP) and no sale. The AO initiated penalty proceedings u/s 271B and then levied the penalty. Aggrieved by the same, the assessee filed appeal before the Commissioner of Income tax (Appeal). CIT(A) confirmed the penalty.
Conclusion- As per the provision of the Act, either Turnover, Sales, or Gross receipts shall exceed Rs. 1 crores. The legislature has used three words, Sales, Turnover, Gross receipts. So while analyzing the business of the assessee the AO has to find out whether the Sale, Gross Receipt or turnover is more than Rs. 1 crores then provisions of Section 44AB will be applicable. Therefore, if any one of Sale, Turnover or gross receipts is more than prescribed limit the provision of Section 44AB will be applicable.
Held that the assessee has merely stated that it was under bonafide belief. This explanation is not acceptable as the assessee is a builder, having advice of professionals like CA. Therefore, the explanation seems to be mere eye wash. The assessee has got its Balance Sheet prepared, Profit and Loss Account prepared from professionals and these are duly signed by CA. Therefore, the explanation of the assessee is not acceptable. The AO has levied minimum penalty of Rs.1,50,000/-. As per provisions of Section 44AB r.w.s 271B, the minimum penalty of Rs.1,50,000/- is for default in not getting books audited when turnover, gross receipts or sales is above Rs.1 crores. Thus, any amount above Rs.1 crores will attract minimum penalty of Rs.1,50,000/-. Therefore, on the facts and circumstances of the case the penalty levied by the AO u/s 271B is upheld. Accordingly, grounds of appeal of the assessee are dismissed.
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