Gopal Agarwal Vs ITO (ITAT Agra)
ITAT Agra held that confirming penalty under section 271B of the Income Tax Act before finalization of quantum assessment is unjust and unfair. Accordingly, matter restored back to CIT(A) for fresh adjudication.
Facts- The case of the assessee was selected by Revenue for framing scrutiny assessment under CASS. There was a cash deposit to the tune of Rs.5,21,89,264/- in the bank accounts of the assessee with the ICICI Bank. The assessee submitted during the course of assessment proceedings that the assessee is engaged in commission business of cash handling. AO called for the details of customers who deposited cash in the assessee’s account. The assessee expressed its inability in submitting details of customers who deposited cash in the assessee’s bank account, and the assessee submitted that the assessee has not maintained books for cash handling business.
AO applied the rate of 8% on the cash deposit and accordingly computed the income of the assessee and added Rs.44,76,376/- to the income of the assessee, vide assessment order dated 01.12.2021 passed by the AO u/s 143(3) r.w.s. 143(3A) and 143(3B). Penalty Proceedings u/s. 271B of the Act were initiated by the AO against the assessee on the ground that the assessee failed to get its accounts audited under the 1961 Act, and failed to furnish the audit report u/s. 44AB of the Act. AO levied penalty of Rs.1,50,000/- u/s. 271B of the Act against the assessee as the assessee’s turnover/gross receipts of the assessee are to the tune of Rs. 5,83,35,487/-,vide penalty order dated 16.03.2022 u/s 271B.
