GURMEET SINGH, RAJPURA V. ITO, Ward, Rajpura

ITA 119/CHANDI/2023

AI Insights

The case involves Shri Gurmeet Singh, a wine contractor, who appealed against penalties levied under sections 271A, 271B, and 271(1)(b) of the Income Tax Act for the assessment year 2011-12. The penalties were related to non-maintenance of books of accounts, failure to get accounts audited, and non-compliance with notices issued under section 142(1), respectively. The Tribunal examined whether the assessee had maintained adequate records to enable the Assessing Officer to compute his income, whether the accounts were audited as required under section 44AB, and whether there was compliance with the notices issued under section 142(1). The Tribunal's decision was based on the interpretation of sections 44AA and 44AB, along with the specific circumstances of the case, including the actions taken by the assessee in response to the notices.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127512 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 05-07-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 28-02-2023
• Other Referred Cases: Sanghamitra Pattanaik vs Income Tax Officer, Shri Udayshankar Narenderaprasad Vs. ITO, Shri Tarun D. Karia Vs. DCIT, Surajmal Parsuram Todi Vs. CIT, Vegetable Products Pvt. Ltd., Shri K.V.Ramachandra Vs DCIT, Bharat Construction Company vs ITO
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOATENIA
• Assessee Lawyers: DEV AHUJA
• Keywords: Reasonable cause; FORM 26AS
• Section: 147; 148; 144; 143(3); 142(1); 139(1); 271B; 44AB; 153; 119

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ , च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH ‘B’ CHANDIGARH BEFORE: SHRI A.D.JAIN, VICE PRESIDENT AND SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER आयकर अपील सं./ ITA Nos. 118, 119 & 120/CHD/2023 नधा रण वष / Assessment Year : 2011-12 Shri Gurmeet Singh, House No. B-1/1315,Jattan Street, Old Rajpura. बनाम VS The ITO, Ward, Rajpura. थायी लेखा सं./PAN /TAN No: ATPPS5975E अपीलाथ /Appellant यथ /Respondent नधा रती क ओर से/Assessee by : Shri Dev Ahuja, Advocate राज व क ओर से/ Revenue by : Smt. Moatenia, JCIT, Sr.DR तार"ख/Date of Hearing : 06.07.2023 उदघोषणा क तार"ख/ Date of Pronouncement : 13.07.2023 आदेश/ORDER PER BENCH These are three appeals filed by the assessee against the respective orders of ld. CIT(A) NFAC, Delhi dated 09.01.2023, 06.01.2023 & 09.01.2023 respectively wherein the assessee has challenged the confirmation of levy of penalty u/s 271A, 271(1)(b) and 271B of the Act. All these matters were heard together and are being disposed of by this consolidated order. ITA- 118,119,120/CHD/2023 A.Y. 2011-12 2 2. Firstly, regarding appeal of the assessee regarding levy of penalty u/s 271A in ITA 118/CHD/2023, during the course of hearing, ld. AR submitted that the assessee was carrying on the business as wine contractor of L-2 and L-14A vends in District SAS Nagar. The return of income was filed on 12-11-2018 after the receipt of notice u/s 148 of the IT Act. During the assessment proceedings, the assessee was required to furnish the following information / documents vide Ld. AO's letter dated 09-11-2018:- a) Amount of Security Deposit and auction money deposited by you prior to allotment of vend(s); b) Details of the vend(s) run by you i.e. its location; owner of the building; rent paid for the same etc; c) Designation & address of the authority allotting vend(s) to you; d) Produce complete books of accounts along with supporting vouchers; e) Copy of statement of bank account(s) maintained by you for this business; and also personal savings bank account. 3. It was submitted that the assessee, accordingly, furnished the following information/documents for completion of assessment vide letters dated 14-11-2018 and 19-11-2018 : i) Detail and source of security deposited with the Excise and Taxation Department. ii) Trading and Profit & Loss Account. iii) Certificate of the authority allotting the vends iv) Copies of all banks accounts. ITA- 118,119,120/CHD/2023 A.Y. 2011-12 3 v) Copy of License fee/Stock Register. vi) Computation of income. vii) Detail of shops taken on rent to run the liquor business. 4. It was submitted that the AO while completing the assessment, initiated penalty proceedings u/s 271A for non- maintenance of books of accounts as per provisions of Sec. 44AA(2)(ii) of the Income Tax Act and imposed a penalty of Rs. 25,000/- vide order u/s 271A dated 29-5-2019. 5. It was submitted by the ld AR that being aggrieved, the assessee carried the matter in appeal before the Ld. CIT(A) and it was submitted that all the documents as stated above which were required for the computation of income of the assessee were produced/furnished during the assessment proceedings. 6. It was submitted before the ld CIT(A) that the assessee has furnished the complete information, so as to enable the AO to compute his total income in accordance with the provisions of IT Act. The AO has also allowed all the expenses claimed by the assessee in the P&L account at Rs. 8,26,263/-. The provisions of section 44AA was required to keep and maintain such documents and accounts as may enable the AO to compute the income of the assessee in accordance with the provisions of IT Act. It was also ITA- 118,119,120/CHD/2023 A.Y. 2011-12 4 submitted that there is no material or evidence on record to establish that the assessee has not maintained documents/accounts due to which the AO could not be able to compute the income of the assessee. The assessee has maintained the accounts and documents which enabled the AO to compute the total income of the assessee. It was also submitted before the Ld. CIT(A) that sub section (3) of section 44AA authorizes the Board to prescribe by Rules the books of account and other documents to be kept and maintained. Since the Board has not prescribed any rules specifying the books of accounts to be maintained by the person carrying on business, the assessee has furnished the documents/information so as to enable the AO to compute the income of the assessee in accordance with the provisions of the Income Tax Act. 7. It was submitted that the Ld. CIT(A) while justifying the action of the AO of imposing the penalty u/s 271A has observed that- "In the submission uploaded by the appellant it is stated that various information/documents were produced for completion of assessment proceedings such as, Trading and P&L account, detail and source of security deposit made with the Excise Department, certificate of authority allotting the vends, copies of bank accounts, copy of license fee/stock register, Form No. 26AS and computation of income. Thus, it was contented that the appellant ITA- 118,119,120/CHD/2023 A.Y. 2011-12 5 furnished adequate information. This contention is not correct for the reason that the question that arise is, as to whether the books of .account as required by the AO has been produced for examination. The answer to this question is negative. As such, the AO has rightly levied the penalty u/s 271A." 8. Before the Ld. CIT(A) it was also contended that the Board has not prescribed the necessary rules relating to maintenance of accounts by the persons carrying on business. In this connection, the Ld. CIT(A) has observed in his order that it is necessary to reproduce Rule 6F for clarity which is inserted by the Income Tax (Ninth amendment) Rules, 1981 with effect from 21/11/1981 specifying the books of accounts to be maintained and has reproduced Rule 6F as below- "CC-Books of Account "Books of account and other documents to be kept and maintained under section 44AA(3) by persons carrying on certain professions. 6F. (1) Every person carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or authorised representative or film artist shall keep and maintain the books of account and other documents specified in sub-rule (2) Provided that nothing in this sub-rule shall apply in relation to any previous year in the case of any person if his total receipts in the profession do not exceed one lakh fifty thousand rupees in any one of the three years" immediately preceding the previous year, or, where the profession has been newly set up in the previous year, his total gross receipts in the profession for that year are not likely to exceed the said amount] ITA- 118,119,120/CHD/2023 A.Y. 2011-12 6 (2) The books of account and other documents referred to in sub-rule (1) shall be the following, namely: (i) a cash book; (ii) a journal, if the accounts are maintained according to the mercantile system of accounting; (iii) a ledger; (iv) carbon copies of bills, whether machine numbered or otherwise serially numbered, wherever such bills are issued by the person, and carbon copies or counterfoils of machine numbered or otherwise serially numbered receipts issued by him: Provided that nothing in this clause shall apply in relation to sums not exceeding twenty-five rupees;] (v) original bills wherever issued to the person and receipts in respect of expenditure incurred by the person or, where such bills and receipts are not issued and the expenditure incurred does not exceed fifty rupees, payment vouchers prepared and signed by the person: [Provided that the requirements as to the preparation and signing of payment vouchers shall not apply in a case where the cash book maintained by the person contains adequate particulars in respect of the expenditure incurred by him.]" 9. The Ld. CIT(A) has held that “From the above, it is clear that the Income Tax Rule 6F provides for maintenance of books of account and other documents to be kept and maintained u/s 44AA(3) by persons carrying on certain professions. Therefore, the contention that the Board has not prescribed the necessary rules for maintenance of account has no merit." ITA- 118,119,120/CHD/2023 A.Y. 2011-12 7 10. In the aforesaid factual matrix, it was submitted by the ld AR that this is not the case of the assessee as he is not carrying on any profession as is mentioned in Rule 6F(1). Hence Rule 6F does not specify any books of account to be maintained by the assessee as his income is from business and not from above mentioned certain professions. However, as per Sec. 44AA(2) every person carrying on business or profession (not being a profession referred to in sub-section (1) shall keep and maintain such books of account and other documents as may enable the Assessing Officer to compute his total income in accordance with the provisions of this Act. 11. The Ld. CIT(A) while justifying the penalty imposed by the AO, has also relied upon the decision of ITAT, Cuttack Bench in the case of Sanghamitra Pattanaik vs Income Tax Officer, Ward - 1, Baripada, which is a case of IMFL dealer who has failed to maintain books of accounts as per the provisions of section 44AA, reported in 117 taxmann.com 179 and has upheld that levying of penalty u/s 271A for not complying with the provisions of section 44AA. In this context, it was submitted that in that case, the assessee Sanghamitra Pattanaik has failed to produce before the AO the books of account and supporting bills and vouchers for the ITA- 118,119,120/CHD/2023 A.Y. 2011-12 8 verification of expenditure claimed by her and arriving at correct taxable profit. The facts of the judgement on which the Ld. CIT(A) has relied upon are clearly different and distinguishable as in that case the assessee did not produce before the AO the books of account and supporting bills and vouchers for the verification of expenditure claimed by the assessee and arriving at correct taxable profit whereas in this case, the assessee, as stated above, has produced/furnished the following documents/information so as to enable the AO to compute the income of the assessee in accordance with the provisions of IT Act. i) Detail and source of security deposited with the Excise and Taxation Department. ii) Trading and Profit & Loss Account. iii) Certificate of the authority allotting the vends. iv) Copies of all banks accounts. v) Copy of License fee/Stock Register. vi) Computation of income. vii) Detail of shops taken on rent to run the liquor business. Further the AO has also allowed all the expenses claimed by the assessee in the P&L account at Rs. 8,26,263/-. 12. It was submitted that while confirming the penalty imposed by the AO u/s 271B for AY 2011-12 for not getting the books of account audited u/s 44AB in the case of the assessee itself, the ITA- 118,119,120/CHD/2023 A.Y. 2011-12 9 Ld. CIT(A) in his order dated 09/01/2023 (at page 5) has observed that- "During the course of penalty proceedings, the appellant has submitted that he has submitted Trading A/c, P&L A/c, Bank Statements, Stock register and Form No. 26AS. When these details were available, it is not known as to why the appellant has not got the Books of Account audited as per the provisions - of section 44AB of the Income Tax Act, 1961." 13. But while deciding the penalty (in question) imposed u/s 271A for non-maintenance of books of account, it was submitted that the Ld. CIT(A) did not consider the above details furnished before the AO as the books of account which enabled the AO to compute the total income of the appellant in accordance with the provisions of the IT Act. Accordingly, it was prayed that the penalty imposed u/s 271A deserves to be deleted. 14. Per contra, the ld. DR relied upon the order of the ld CIT(A) and has taken us through his findings which are contained at para 5 of the impugned order which read as under : “ 5. Findings and Decision: I have carefully considered Form 35, statement of facts, order passed u/s. 271A, submission uploaded in the system and the Grounds of Appeals raised. This appeal is filed against the order passed u/s. 271A on 29/05/2019. It is understood from the order passed by the AO that the AO had issued notice u/s 142(1) dated 24/08/2018 requesting for production of books of Account and other documents that are required to compute the Appellant's total income in accordance with the provisions of Income Tax Act. Whereas, the appellant has not only failed to ITA- 118,119,120/CHD/2023 A.Y. 2011-12 10 respond to the notice but also failed to produce the books of accounts. Therefore, after providing opportunity to the appellant, penalty u/s 271A has been levied. In the submission uploaded by the appellant it is stated that various information/documents were produced for completion of assessment proceedings such as, Trading and P&L account, detail and source of security deposit made with the Excise Department, certificate of authority allot in the vends, copies of bank accounts, copy of license fee/stock register, Form No.26AS and computation of income., Thus, it was contented that the appellant furnished adequate information. This contention is not correct for the reason that the question that arise is, as to whether the books of account as required by the AO has been produced for examination. The answer to this question is negative. As such, the AO has rightly levied the penalty u/s 271 A. It is also contended that the Board has not prescribed any rule as per subsection (3) of section 44AA prescribing the books of accounts and other documents to be kept and maintained. In this connection, it is necessary to reproduce rule 6F which is inserted by the Income tax (Ninth amendment) Rules, 1981 with effect from 21/11/1981 specifying the books of accounts to be maintained. The same is reproduced below for clarity. "CC- Books of Account "Books of account and other documents to be kept and maintained under section 44AA(3) by persons carrying on certain professions. 6F. (1) Every person carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or authorised representative or film artist shall keep and maintain the books of account and other documents specified in sub-rule (2) Provided that nothing in this sub-rule shall apply in relation to any previous year in the case of any person if his total receipts in the profession do not exceed one lakh fifty thousand rupees in any one of the three years" immediately preceding the previous year, or, where the profession has been newly set up in the previous year, his total gross receipts in the profession for that year are not likely to exceed the said amount] (2) The books of account and other documents referred to in sub-rule (1) shall be the following, namely:- (i) a cash book; (ii) a journal, if the accounts are maintained according to the mercantile system of accounting: (iii) a ledger; [(iv) carbon copies of bills, whether machine numbered or otherwise serially numbered, wherever such bills are issued by the person, and carbon copies or counterfoils of machine numbered or otherwise serially numbered receipts issued by him: Provided that nothing in this clause shall apply in relation to sums not exceeding twenty-five rupees;] ITA- 118,119,120/CHD/2023 A.Y. 2011-12 11 (v) original bills wherever issued to the person and receipts in respect of expenditure incurred by the person or, where such bills and receipts are not issued and the expenditure incurred does not exceed fifty rupees, payment vouchers prepared and signed by the person: [Provided that the requirements as to the preparation and signing of payment vouchers shall not apply in a case where the cash book maintained by the person contains adequate particulars in respect of the expenditure incurred by him.]" From the above, it is clear that the Income Tax Rule, 6F provides for maintenance of books of accounts and other documents to be kept and maintained u/s 44AA(3) by persons carrying on certain professions. Therefore, the contention that the Board has not prescribed the necessary rules for maintenance of accounts has no merit. It must be mentioned here that the Hon. ITAT, Cuttack bench in the case of Smt. Sanghamitra Pattnaik vs Income Tax Officer, Ward-1, Baripada, which is a case of IMFL dealer who has failed to maintain books of accounts as per the provisions of section 44AA, reported in 117 taxmann.com 179 has held that levying of penalty u/s 271A for not complying with the provisions of section 44AA was upheld. Respectfully, following the above decision, the penalty levied is upheld. Moreover, when the opportunity has been given during the appellant proceedings the appellant assessee has failed to explain the reason for non-maintenance/non production of books of accounts, with reasonable cause and failed to prove, its case. Thus, the levy of penalty is upheld and the grounds raised are / dismissed.” 15. In appeal of the assessee regarding levy of penalty u/s 271B in ITA 120/CHD/2023, during the course of hearing, ld. AR submitted that during the year, the assessee was a Wine Contractor and carrying on the business of L-2 and L-14A vends in District SAS Nagar and tax at source was collected amounting to Rs. 1,90,870/-. The return of income for A.Y. 2011-12 was filed on 12-11-2018 declaring net income at Rs. NIL. Penalty proceedings u/s 271B were initiated for not getting the books of account audited u/s 44AB of the Income Tax Act vide notice dated ITA- 118,119,120/CHD/2023 A.Y. 2011-12 12 19-11-2018 and penalty was imposed at Rs.1,50,000/- vide order dated 30-05-2019. 16. It was submitted before the Ld. CIT(A) that the AO vide order dated 29.05.2019 has imposed a penalty of Rs. 25,000/- u/s 271A for not maintenance of books-of account as per the provisions of Sec. 44AA of the Act. It has also been submitted that since the assessee has been penalized for the said default, there cannot be any possibility of getting the accounts audited as per the requirement of Sec. 44AB of the Act and accordingly no separate penalty for non-audit of the accounts could be levied u/s 271B of the Act. That once a person commits an offence by not maintaining the books of account as required u/s 44AA of the Act, the offence of the assessee is complete by itself. In such a case, where no books of account are maintained by the assessee, there cannot be any possibility of getting the accounts audited, as per the requirement of Sec. 44AB of the Act. To penalize the assessee under both the provisions - for penalty u/s 271A and for penalty u/s 271B of the Act - shall result in double jeopardy to the assessee. The reliance was placed on the decision of Hon'ble Tribunal in the case of Shri Udayshankar Narenderaprasad Vs. ITO (ITA No. 223/Ahd/2013). While deciding the case the Hon'ble ITA- 118,119,120/CHD/2023 A.Y. 2011-12 13 Tribunal has taken the support from the decision of following Hon'ble Courts - the issue is covered with the decision of the Hon'ble Allahabad High Court in CIT vs. Bisauli Tractors 299 ITR 219. The issue ITA No. 223/Ahd/2013 is also covered with the decision of the Co-ordinate Bench of the ITAT, Ahmedabad in Shri Tarun D. Karia Vs. DCIT in ITA No. 3545/Ahd/2000 dated 16-11-2007 where identical issue was decided in favour of the assessee by following the decision of the Hon'ble Gauhati High Court in the case of Surajmal Parsuram Todi Vs. CIT. The Hon'ble ITAT, has also relied upon the decision of the Hon'ble Supreme Court in the case of Vegetable Products Pvt. Ltd. and the decision of the Co-ordinate Bench of the ITAT, in Shri Tarun D. Karia Vs. DCIT (supra), wherein the decision of the Hon'ble Gauhati High Court in the case of Surajmal Parsuram Todi Vs. CIT (supra) was followed, and decided the issue in favour of the assessee, and penalty levied under section 271B of the Act has been cancelled. 17. It was also contended before the Ld. CIT(A) that it was first year of the assessee when his case falls u/s 44AB of the IT. Act. The Ld CIT(A) while justifying the action of the AO of imposing the penalty u/s 271B amounting to Rs. 1,50,000/- in his order has observed that the plea of the appellant that it was his first year of operation is not correct for the reason that whether the business is of first year or second year or final year, once the turnover exceeds the limit prescribed u/s 44AB of the Income Tax Act, the ITA- 118,119,120/CHD/2023 A.Y. 2011-12 14 appellant not only must maintain books of accounts, but also get such books of account audited. 18. It was submitted that the Ld CIT(A) has not considered the submissions made before him- "That once a person commits an offence by not maintaining the books of account as required u/s 44AA of the Act, the offence of the assessee is complete by itself. In such a case, where no books of account are maintained by the assessee, there cannot be any possibility of getting the accounts audited, as per the requirement of Sec. 44AB of the Act. To penalize the assessee under both the provisions - for penalty u/s 271A and for penalty u/s 271B of the Act - shall result in double jeopardy to the assessee. The reliance was placed on the decision of Hon'ble Tribunal in the case of Shri Udayshankar Narenderaprasad Vs. ITO - ITA No. 223/Ahd/2013. Copy of order is attached. 19. It was submitted that the order of the Ld CIT(A) is silent on the decision of Shri Udayshankar Narenderaprasad Vs. ITO, Ahmedabad on which the appellant has relied upon as he has not made any reference and discussed this judgement in his order. 20. It was further submitted that the Ld CIT(A) in his order (page 5) has also held that- “During the course of penalty proceedings the appellant has submitted that he submitted Trading A/c, P&L A/c, Bank Statements, Stock register and Form No. 26AS. When these details were available, it is not known as to why the appellant has not got the Books of Account audited as per the provisions of section 44AB of the Income Tax Act, 1961.” ITA- 118,119,120/CHD/2023 A.Y. 2011-12 15 21. In this context, it was submitted that while deciding the penalty u/s 271A for non-maintenance of books of account for A.Y.2011-12 in the case of appellant itself, the Ld CIT(A) has confirmed the penalty by not considering the above details (Trading A/c, P&L A/c, Bank Statements, Stock register and Form No. 26AS) furnished before the AO as books of account enabling the AO to compute the income of the appellant. But while deciding the penalty imposed u/s 271B by the AO, he observed that when the above details were available, it is not known as to why the appellant has not got the Books of Account audited as per the provisions of section 44AB of the Income Tax Act, 1961. 22. It was further submitted that in his order the Ld CIT(A) has observed (at page 5) that the assessee was not cooperative with the department by filing the return of income voluntarily as provided u/s 139(1) and did not respond to notice u/s 148. In this context it was submitted that penalty initiated u/s 271F for non-filing of return has not been imposed by the AO considering the reply of the assessee. Return of income has also been filed after the receipt of notice u/s 148 which has duly been considered while completing the assessment. Therefore, it is not correct that the assessee was not cooperative. ITA- 118,119,120/CHD/2023 A.Y. 2011-12 16 23. It was submitted that in last para of his order the Ld CIT(A) has also observed that "Moreover, when the opportunity has been given during the appellate proceedings the appellant assessee has failed to explain the reasons for non-production of books of account...." In this context it is respectfully submitted that during the appellate proceedings in respect of penalty imposed u/s 271A, the following documents/information have been furnished- i) Detail and source of security deposited with the Excise and Taxation Department. ii) Trading and Profit & Loss Account. iii) Certificate of the authority allotting the vends. iv) Copies of all banks accounts. v) Copy of License fee/Stock Register. vi) Computation of income. vii) Detail of shops taken on rent to run the liquor business. 24. Considering the above details, the ld CIT(A) has observed that when these details were available, it is not known as to why the appellant has not got the books of accounts audited. Therefore, it cannot be said that the assessee has not produced the books of account. The above documents/details were furnished before the AO enabling him to compute the income of the assessee. ITA- 118,119,120/CHD/2023 A.Y. 2011-12 17 25. Keeping in view the facts and circumstances of the case as explained above and considering the decision of Hon'ble Tribunal in the case of Shri Udayshankar Narenderaprasad Vs. ITO - ITA No. 223/Ahd/2013 it was prayed that the penalty imposed u/s 271B may kindly be deleted. 26. Further, he has also relied on the decision of the Co-ordinate Cochin Bench in case of Shri K.V.Ramachandra Vs DCIT (ITA 208/Cochin/2012 dated 28.03.2013). 27. Per contra, the ld. DR relied on the decision of the Hon’ble Madhya Pradesh High Court in case of Bharat Construction Company vs ITO (1999) 153 CTR 414. Further, she has relied on the order and findings of the ld CIT(A) which are contained at para 5 of the impugned order which reads as under : “5. Findings and Decision: I have carefully considered Form 35, statement of facts, order passed u/s. 271B, submission uploaded in the system and the Grounds of Appeals raised. This appeal is filed against the order passed u/s. 271B on 30/05/2019. The submission upload is reproduced below for clarity: "During the year the appellant has been deriving the income from running of liquor shops and tax by the distilleries and the liquor distributors and tax at source was collected amounting to Rs. 1,90,870/- The return of income for AY. 2011-12 has been filed on 12-11-2018 declaring net income at Rs. NIL by ignoring a loss of Rs. 1,96,673/ and a refund of Rs. 1,90,870/- has been claimed. The return was filed in response to notice u/s 148. ITA- 118,119,120/CHD/2023 A.Y. 2011-12 18 2. Penalty u/s271B has been imposed at Rs. 1,50,000/- vide order dated 30-05-2019 for not getting the accounts audited. It was submitted before the learned AO that this was the first FY 2010-11 when the assessee was required to get his accounts audited as the total sales/turnover has exceeded the limit for getting his accounts audited. The Ld. AO has not accepted the plea of the assessee by observing that "the fact that turnover from business will likely to exceed the prescribed limit for maintenance the books of accounts was in the' knowledge of the assessee, as the license fee paid by the assessee itself was at Rs 1,61,50,082/- Therefore, as per provisions of Sec. 44AA(2)(ii) the assessee was required to maintain books of account and were to be got these audited as per provisions of Sec. 44AB of the Act. The Ld. AO has tried to prove that the turnover from the business was within the knowledge of the assessee which exceeded the prescribed limit, therefore, the assessee was required to maintain books of account and were to be got audited as per provisions of Sec. 44AB of the Act. 3. Before the Ld. AO it was never claimed/pleaded that the quantum of turnover was not within the knowledge of the assessee. But this was his first year when his case falls u/s 44AB of the Income Tax Act, It was also submitted that imposition of penalty u/s 2718 is not mandatory. As per the provisions of section 2738. no penalty shall be imposable if the assessee proves that there was a reasonable cause for the failure. As requested before the learned AO that this year i.e. F. Y. 2010-11 was assessee's first year when his case falls u/s 44AB and he was not aware that he is required to get his accounts audited. Therefore, there was a reasonable cause for the said failure. Without prejudice to the above, it is respectfully, submitted- 4. That the assessee has not maintained its books of account as per the provisions of Sec. 44AA of the Act and, therefore, penalty under Sec. 271A for non-maintenance of book of accounts as required u/s 44AA of the Act has been levied amounting to Rs. 25,000/- by the Ld. AO vide his order u/s 271A of the Income Tax Act on 29.05.2019. Copy of the order is attached. It is respectfully submitted that since the assessee has been penalized for the said default, there cannot be any possibility of getting the accounts audited as per the requirement of Sec. 44AB of the Act and accordingly no separate penalty for non-audit of the accounts could be levied u/s 271B of the Act. 5. That once a person commits an offence by not maintaining the books of account as required u/s 44AA of the Act, the offence of the assessee is complete by itself. In such a case, where no books of account are maintained by the assessee, there cannot be any possibility of getting the accounts audited, as per the requirement of Sec. 44AB of the Act. To penalize the assessee under both the provisions for penalty u/s 271A and for penalty u/s 271B of the Act-shall result in double jeopardy of the assessee. The reliance is placed,on the decision of Hon'ble Tribunal in the case of Shri Udayshankar Narenderoprasad Vs ITO-ITA No.223/Ahd/2013. Copy of order is attached. While ITA- 118,119,120/CHD/2023 A.Y. 2011-12 19 deciding the case the Hon'ble Tribunal has taken the support from the decision of following Hon'ble Courts - the issue is covered with the decision of the Hon'ble Allahabad High Court in CIT vs. Bisauli Tractors 299 ITR 219. The issue ITA No. 223/Ahd/2013 is also covered with the decision of the Coordinate Bench of the IT AT, Ahmedabad in Shri Tarun D Karia Vs. DCIT in ITA No. 3545/Ahd/2000 dated 16-11-2007 wherein identical issue was decided in favour of the assessee by following the decision of the Hon'ble Gauhati High Court in the case of Surajmal Parsuram Todi Vs. CIT . The Hon'ble IT AT, has also relied upon the decision of the Hon'ble Supreme Court in the case of Vegetable Products Pvt Ltd (supra) and the decision of the Co-ordinate Bench of the IT AT, in Shri Tarun D Karia Vs DCIT (supra), wherein the decision of the Hon'ble Gauhati High Court in the case of Surajmal Parsuram Todi Vs CIT (supra) was followed, and decided the issue in favour of the assessee, and penalty levied under section 271B of the Act has been cancelled." It is the contention of the appellant that he was under bonafide believe that he was not required to get his accounts audited u/s 44AB as it was first year of operation. This plea of the appellant is not correct for the reason that whether the business is of first year or second year or final year, once the turnover exceeds the limit prescribed u/s 44AB of the Income Tax Act, the appellant not only must maintain books of accounts, but also get such books of account audited on or before prescribed due date. In the instant case, though the turnover of the assessee exceeded the limit prescribed, he has failed to get his accounts audited. Therefore, the AO has rightly levied the penalty. During the course of penalty proceedings the appellant has submitted that he has submitted Trading A/c, P&L A/c, Bank Statements, Stock register and Form No.26AS. When these details were available, it is not known as to why the appellant has not got the Books of Accounts audited as per the provisions of section 44AB of the Income Tax Act, 1961. It is observed from the proceedings that the assessee was not cooperative with the department by filing the return of income voluntarily as provided u/s 139(1), he did not respond to the notice issued u/s 148 and he did not respond to the notice issued u/s 142(1). This conduct of the appellant, shows that he was not co-operative with the department. Moreover, when the opportunity has been given during the appellate proceedings the appellant assessee has failed to explain the reason for non- production of books of accounts/not getting the books of accounts audited, with reasonable cause and failed to ITA- 118,119,120/CHD/2023 A.Y. 2011-12 20 prove his case. Thus, the levy of penalty is upheld and the grounds raised are dismissed.” 28. We have heard the rival contentions and purused the material available on record. The levy of penalty u/s 271A for non-maintenance of books of accounts and levy of penalty u/s 271B for not getting the books of accounts audited are under challenge before us. 29. It is a settled law that penalty provisions have to be strictly construed and there has to be a specific charge and specific finding has to be recorded by the AO before the liability towards levy of penalty can be fastened on the assessee. 30. Section 271A provides that where a person fails to keep and maintain any such books of account and other documents as required by Section 44AA or the rules made thereunder, in respect of any previous year, the AO may direct that such person shall pay by way of penalty a sum of Rs 25,000/-. Where the assessee shows reasonable cause for such failure, no penalty u/s 271A is imposable. The levy of penalty u/s 271A is thus subject to reasonable cause being shown by the assessee for failure to maintain such books of accounts. ITA- 118,119,120/CHD/2023 A.Y. 2011-12 21 31. Section 44AA talks about maintenance of books of accounts by certain persons carrying on profession or business and the relevant provisions under consideration are sub-section (2) of section 44AA which provides that every person carrying on business shall keep and maintain such books of accounts and other documents as may enable the Assessing officer to compute his total income in accordance with the provisions of the Act. Sub-section (1) and sub-section (3) are relevant in context of specified professions and are thus not relevant in the instance case where the assessee is admittedly involved in the business of wine trading as holder of L-2 AND L-14A vends in district SAS Nagar. Thus, what is relevant to examine is whether the assessee in the instant case has maintained such books of accounts which has enabled the AO to compute his total income in accordance with the provisions of the Act. 32. On perusal of records, it is noted that the assessee has not filed any return of income originally u/s 139, subsequently, the case of the assessee was re-opened by issuance of notice u/s 148 of the Act. In response the notice, there was again no compliance in terms of filing of return of income and thereafter, notice u/s 142(1) was issued and information/documentation was sought and ITA- 118,119,120/CHD/2023 A.Y. 2011-12 22 thereafter, the assessment was completed u/s 147 r/w 144 of the Act based on material available on record and/or submitted by the assessee. During the course of assessment proceedings, the assessee produced trading and profit/loss account and on review thereof, the AO noticed that the assessee has shown sales of Rs 3,59,65,400/-, purchases of Rs 1,95,43,244/-, licence fees of Rs 1,57,39,457/- and computed gross profit of Rs 6,04,698/- and net loss of Rs 2,09,119/-. In order to verify the same, the assessee was asked to produce the books of accounts. In response, the assessee failed to furnish any books of accounts and at the same time, furnished copy of licence fee register, bank statements and Form 26AS details and thereafter, the AO examined the same, the matter was discussed with the Counsel of the assessee and the AO recorded a finding that profit/loss account furnished by the assessee was incorrect and thereafter, the AO went ahead and re- drawn the trading account and the profit/loss account and recomputed the gross profit at Rs 10 lacs as against Rs 6 lacs shown by the assessee. While doing so, the AO took into consideration sales as declared by the assessee in its profit/loss account, the purchases as per Form 26AS wherein TCS has been done by the Distilleries and liquor distributor, the licence fees as per register produced by the assessee besides loading and ITA- 118,119,120/CHD/2023 A.Y. 2011-12 23 unloading charges. Thereafter, the net profit was computed at Rs 1,87,953/- after allowing for expenses as claimed by the assessee in its profit/loss account. The AO recorded a finding that given that the assessee has not been able to produce complete books of accounts, basis material available on record and/or as submitted by the assessee during the course of assessment proceedings, the income of the assessee was determined and assessed at Rs 1,87,950/- and penalty proceedings u/s 271A were initiated by notice dated 19/11/2018 for non-maintenance and consequent non-production of books of accounts. 33. During the penalty proceedings, initially there was no response from the assessee to the notice dated 19/11/2018 and only in response to another notice dated 25/03/2019, the assessee filed a written submission dated 5/04/2019 stating that all the documents which were required for the computation of income were produced/furnished during the course of assessment proceedings, there was no loss to the Revenue as the income returned and assessed was at loss. 34. The submissions so filed by the assessee were considered but not found acceptable to the AO. As per the AO, no reasonable cause has been shown by the assessee for non-maintenance of ITA- 118,119,120/CHD/2023 A.Y. 2011-12 24 books of accounts and the fact that the income has been assessed at loss doesn’t absolve the assessee from maintenance of books of accounts as per provisions of section 44AA(2)(ii) of the Act. It was held by the AO that the very fact that the assessee had paid licence fee of Rs 1,61,50,082/- and there are purchases for running of L-2 and L-4 vends to the tune of Rs 1,95,43,244/-, the turnover of the assessee would exceed the prescribed threshold for maintenance of books of accounts has not been disputed by the assessee and in view of the same, in absence of any reasonable cause shown by the assessee for non-maintenance of books of accounts and failure to complete with the provisions of section 44AA(ii), the AO levied the penalty of Rs 25,000/- u/s 271A of the Act. 35. We therefore find that there is a clear recording of satisfaction by the AO during the course of assessment proceedings as to non- maintenance of books of accounts by the assessee and the penalty has been rightly initiated by the AO by issuance of notice u/s 271A dated 19/11/2018. Further, during the penalty proceedings, the AO has clearly recorded his findings as to failure on part of the assessee in terms of non-maintenance of books of accounts and absence of any reasonable cause shown by the assessee for ITA- 118,119,120/CHD/2023 A.Y. 2011-12 25 non-maintenance of books of accounts and thus, a failure to comply with the provisions of section 44AA(2)(ii) leading to levy of penalty of Rs 25,000/- u/s 271A of the Act. 36. During the appellate proceedings, the assessee reiterated his submissions and assailed the findings of the AO stating that requisite information was furnished by the assessee during the course of assessment proceedings. The ld CIT(A) rejected the submissions holding that the question under consideration is whether the books of accounts as required by the AO has been produced by the assessee for examination before the AO or not, and the facts as emerging from records are that the assessee has failed to produce the same. Further, the ld CIT(A) refers to Rule 6F which prescribes the books of accounts to be maintained by the assessee. The ld CIT(A) thereafter recorded a finding that even during the appellate proceedings, the assessee has failed to explain the reasons for non-maintenance of books of accounts and in absence of any reasonable cause shown by the assessee and following the decision of the Coordinate Cuttack Benches in case of Smt Sanghamitra Pattnaik (supra), another case of IMFL liquor dealer where penalty has been upheld, the ld CIT(A) has upheld the levy of penalty u/s 271A of the Act. ITA- 118,119,120/CHD/2023 A.Y. 2011-12 26 37. Before us, the ld AR has assailed the findings of the ld CIT(A) contending that Rule 6F is not applicable as the assessee is not engaged in any specified profession as referred therein but involved in the business of liquor trade. At the same time, it has been admitted that provisions of section 44AA(2) are applicable in case of the assessee and in that regard, it has been reiterated that the assessee has submitted the requisite information/documents so as to enable the AO to compute the income of the assessee and which the ld CIT(A) has failed to consider while confirming the levy of penalty. It has been further contended that the facts of the case in case of Sanghamitra Pattanaik (Supra) are distinguishable and thus, the decision of the Coordinate Cuttack Bench doesn’t support the case of the Revenue. 38. We have carefully examined the contentions so advanced by the ld AR. No doubt, Rule 6F which has its origins in sub-section (3) of Section 44AA, the said provisions are not applicable in case of the assessee as the assessee is not engaged in any specified profession and has been involved in liquor business. At the same time, the provisions of section 44AA(2)(ii) are clearly attracted in the instant case which, as we have noted above, talks about every person carrying on business having the prescribed ITA- 118,119,120/CHD/2023 A.Y. 2011-12 27 sales/turnover shall keep and maintain such books of accounts and other documents as may enable the Assessing officer to compute his total income in accordance with the provisions of the Act. 39. The ld AR has been emphasizing on the fact that the assessee has produced the relevant information/documentation and which has been considered by the AO and thus has enabled him to compute total income in hands of the assessee. The language of the Statue however talks about “maintenance of books of accounts and other documents” and therefore, what is relevant is maintenance of books of accounts as well as other documents and not either books of accounts or other documents. Both the books of accounts and other documents which can support, supplement and explain the entries and the transactions so recorded in the books of accounts are required to be maintained and where so asked by the AO, are required to be produced for examination for necessary verification. 40. In the instant case, in response to notice u/s 148 of the Act, we find that the assessee chooses to remain quiet and there was no compliance even in terms of filing of return of income and thereafter, only in response to issuance of notice u/s 142(1), ITA- 118,119,120/CHD/2023 A.Y. 2011-12 28 certain information/documentation was furnished and thereafter, the AO completed the best judgment assessment u/s 147 r/w 144 of the Act based on material available on record and/or submitted by the assessee. During the course of assessment proceedings, the assessee produced trading and profit/loss account and on review thereof, the AO noticed that the assessee has shown sales of Rs 3,59,65,400/-, purchases of Rs 1,95,43,244/-, licence fees of Rs 1,57,39,457/- and computed gross profit of Rs 6,04,698/- and net loss of Rs 2,09,119/-. In order to verify the same, the assessee was specifically asked to produce the books of accounts by the AO but in response, the assessee merely furnished copy of licence fee register, bank statements and Form 26AS and no books of accounts were furnished. The AO left with no option proceeded to examine the limited information so furnished by the assessee and has recorded a finding that profit/loss account furnished by the assessee was incorrect and thereafter, the AO went ahead and re- drawn the trading account and the profit/loss account and recomputed the income in the hands of the assessee. We therefore find that even though what books of accounts have to be maintained by the assessee have not been specified, the books of accounts should be such which documents, accounts for and thus, explain the transactions undertaken by the assessee in terms of ITA- 118,119,120/CHD/2023 A.Y. 2011-12 29 sales, purchases, licence fees and other expenditure so incurred by the assessee and while doing so, it follows the basic and well- recognised principles of accounting and which in turn will enable to compute the income in the hands of the assessee as per the provisions of the Act. Merely furnishing the trading and profit/loss account which is a sum total of various transactions as so claimed to be undertaken by the assessee during the financial year and which summarises the position at the end of the financial year cannot by any stretch of imagination and by any accountancy standard be called as furnishing of books of accounts by the assessee. Further, as we have noted above, furnishing of information/documentation in terms of licence fee register, bank statements and Form 26AS doesn’t absolve the assessee from maintenance of books of accounts which the assessee is required to maintain admittedly having the sales/turnover beyond the prescribed threshold. 41. We therefore find that it is a clear case of failure on part of the assessee to maintain the books of accounts as so required under section 44AA(2)(ii). Further, nothing has been stated during the assessment proceedings, penalty proceedings, during the appellate proceedings before the ld CIT(A) and even before us as to ITA- 118,119,120/CHD/2023 A.Y. 2011-12 30 what prevented the assessee from maintenance of books of accounts so required to be maintained. Thus, in absence of any reasonable cause being shown by the assessee for non- maintenance of books of accounts, we see no reasons but to confirm the levy of penalty u/s 271A of the Act. 42. The decision of the Coordinate Cuttack Bench in case of Smt. Sanghamitra Pattanik (supra) also supports the case of the Revenue. In that case, the assessee was deriving income from sale of IMFL and submitted audit report along with balance sheet, profit/loss account, bank statements, licence fee receipts and copy of VAT returns, however, the books of accounts were not produced as called for examination by the AO. The Coordinate Bench confirmed the levy of penalty holding that although the assessee is not supposed to maintain specified books of accounts as mentioned in Rule 6F, 44AA(2) mandates every person to keep and maintain such books of accounts and other documents as may enable the AO to compute total income in accordance with the provisions of the Act. It was held by the Coordinate Bench that in absence of books of accounts and lack of verification thereof, the AO rejected the books results as shown in the return of income and estimated the profits which are brought to tax in hands of the ITA- 118,119,120/CHD/2023 A.Y. 2011-12 31 assessee and thus, on conjoint reading of provisions of section 44AA and section 271A r/w 273B, levy of penalty was confirmed. The facts of the present case are thus pari-materia and thus, supports the case of the Revenue in the instant case. 43. In light of aforesaid discussions and in the entirety of facts and circumstances of the case, we uphold the order of the ld CIT(A) and the appeal of the assessee is thus dismissed. 44. Now, coming to levy of penalty u/s 271B for not getting the books of accounts audited, Section 271B provides that where a person fails to get his accounts audited in respect of any previous year or furnish a report of such audit as required u/s 44AB, the AO may direct that such person shall pay by way of penalty a sum equal to 1/2 percent of the total sales/turnover/gross receipts of business of such previous year or a sum of Rs 150,000/-, whichever is less. Where the assessee shows reasonable cause for such failure, no penalty u/s 271A is imposable. The levy of penalty u/s 271A is thus subject to reasonable cause being shown by the assessee for failure to get his accounts audited. 45. Section 44AB provides that every person carrying on business shall get his accounts of previous year audited by an accountant before the specified date and furnish report of such accountant by ITA- 118,119,120/CHD/2023 A.Y. 2011-12 32 that date where his total sales/turnover/gross receipts in the business exceeds Rs one crore in any previous year. In the instant case, it is admitted position that total sales of the assessee’s business was Rs 3,59,65,400/- and thus, the assessee was under obligation to get his accounts audited as required u/s 44AB of the Act. It is also an admitted position that the assessee has not maintained any books of accounts at first place. Where there are no books of accounts which have been maintained by the assessee, the question of audit of such books of accounts doesn’t arise and thus, the very basis for levy of penalty u/s 271B doesn’t survive and thus, the penalty so levied deserve to be set-aside. 46. The Co-ordinate Ahmedabad Benches in case of Shri Udayshankar Narendraparsad vs ITO (Supra) has considered an identical matter and the levy of penalty u/s 271B has been deleted holding that where no books of accounts are maintained by the assessee, there cannot be any possibility of getting the books of accounts audited and to penalize the assessee u/s 271A as well as 271B would amount to double jeopardy. While so deciding the matter, the Coordinate Bench has stated that the case of the assessee is covered in his favour by the decision of the Hon’ble Gauhati High Court in case of Surajmal Pasrsuram Todi vs CIT as ITA- 118,119,120/CHD/2023 A.Y. 2011-12 33 well as the decision of the Hon’ble Allahabad High Court in case of CIT vs Bisauli Tractors and even though there is adverse decision in case of Madhya Pradesh High Court in case of Bharat Construction company vs ITO, as also referred before us, following the decision of the Hon’ble Supreme Court in case of Vegetable Products Pvt Ltd, the matter has been decided in favour of the case. We are in agreement with the decision of the Coordinate Ahmedabad Benches. Similarly, the Coordinate Cochin Benches in case of Shri K.V Ramchandran (supra) has taken a similar view following the decision of the Pune Benches in case of Shri Ramchndra D Keluskar (ITA no. 668/PN/10). In absence of any contrary authority on the subject including that of the Jurisdictional High Court, following the principle of consistency, the levy of penalty u/s 271B is hereby deleted. 47. In the result, the appeal of the assessee is allowed. 48. Now, coming to the appeal of the assessee in ITA 119/CHD/2023 regarding levy of penalty u/s 271(1)(b) for not responding to the notice u/s 142(1) issued by the AO, during the course of hearing, ld. AR submitted that the assessee was carrying on the business as wine contractor of L-2 and L-14A vends in District SAS Nagar. Return of income for AY 2011-12 was filed ITA- 118,119,120/CHD/2023 A.Y. 2011-12 34 after the receipt of notice u/s 148 of the IT Act. Penalty proceedings u/s 271 (1)(b) were initiated for non-compliance of notice u/s 142(1) of the IT Act 1961 dated 26-10-2018 vide Notice u/s 271 of the IT Act dated 19.11.2018. But the penalty u/s 271 (1)(b) has been levied for non-compliance of notice u/s 142(1) dt. 24-08-2018. It was submitted that no penalty proceedings have ever been initiated for non-compliance of notice u/s 142(1) dt. 24- 08-2018 for which the penalty u/s 271(1)(b) has been imposed at Rs. 10,000/- vide order dated 15-05-2019, hence penalty imposed u/s 271 (1)(b) is not valid. 49. It was further submitted that vide above notice u/s 142(1) dated 26-10-2018 the assessee was required to furnish the following information:- "a) Amount of Security Deposit and auction money deposited by you prior to allotment of vend(s); b) Details of the vend(s) run by you i.e. its location; owner of the building; rent paid for the same etc; c) Designation & address of the authority allotting vend(s) to you; d) Produce complete books of accounts along with supporting vouchers; e) Copy of statement of bank account(s) maintained by you for this business; and also personal savings bank account." ITA- 118,119,120/CHD/2023 A.Y. 2011-12 35 50. It was submitted that during the assessment proceeding all the above information and documents were furnished vide letters dated 14-11-2018 and 19-11-2018. The return of income for the A.Y. 2011-12 was also filed on 12-11-2018. In the assessment order dated 19-11-2018 it has been stated that- "Sh. Dev Ahuja Advocate, counsel for the assessee attended the assessment proceedings and furnished the requisite information, which was placed on file after examination and discussion with him the assessment is framed on the basis of material available on record." 51. It was submitted that from the assessment order it is evidently clear that Counsel for the assessee has appeared before the Assessing Officer from time to time and explained the return of income and the case was discussed with the Counsel for the assessee. During the assessment proceedings, the documents and details have also been furnished as is mentioned in the assessment order. It was submitted that the learned AO has not issued any further notices to the assessee to call for details. Hence there was no non-compliance of the statutory notices. 52. Reliance was also placed in the case of Globus Infocom Ltd. Vs DCIT (ABCAUS 2578(2018)(10) ITAT) - wherein it has been held that no penalty u/s 271 (1 )(b) is leviable when as per the assessment order, the assessee appeared from time to time and ITA- 118,119,120/CHD/2023 A.Y. 2011-12 36 explained the return of income and furnished documents as requisitioned and case was heard and discussed. It was submitted that the Ld. CIT(A) has not considered this case of Globus Infocom Ltd. Vs DCIT (ABCAUS 2578(2018)(10) ITAT) on which the assessee has relied upon, as there is no mention/discussion of this judgement in his order. 53. The Ld. CIT(A) has referred to the provisions of Section 271(1)(b) of the IT Act, 1961- "271.- Failure to furnish returns, comply with notices, concealment of income, etc. (1)(b) has failed to comply with a notice (under sub-section (2) of Section 115WD or under sub-section (2) of Section 115WE or) under sub-section (1) of Section 142 or sub-section (2) of Section 143 (or fails to comply with a direction issued under sub-section 2A of Section 142) or He May direct such person shall pay by way of penalty,- (ii) in the cases referred to in clause (b), (in addition to tax, if any, payable) by him, a sum (of ten thousand rupees) for each failure." 54. The Ld. CIT(A) has thereafter concluded that- "It is clear from bare reading of the above provisions that whether or not the penalty as envisaged in Section 271(1)(b) of the Act is to be imposed, is a matter to be determined by the Assessing Officer within the meaning of Section. He may direct such penalty to be paid and conversely, it would be correct to say, he may choose not to so direct for such penalty to be paid. To determine whether the default was willful or otherwise, the explanation offered, if any, by the appellant shall be imposed, inter-alia, u/s 271(1)(b), where ITA- 118,119,120/CHD/2023 A.Y. 2011-12 37 the assessee establishes a reasonable cause for failure referred to in the said section." 55. The Ld. CIT(A) has further observed that- "In the instant case, it is very clear from the order on the grounds of appeal raised by the appellant that the appellant did not respond to the notice issued u/s 142(1) dated 24.08.2018." and further observed in his order that- "this fact is very clear from the detailed order passed in the case, whereas, in the submissions made the appellant has tried to explain that there was response from him at later stage, which is nothing but an afterthought" and has held that the AO has rightly levied the penalty.” 56. It was submitted that the Ld. CIT(A) has not appreciated the facts that it was evidently clear that the Counsel for the assessee appeared before the Ld. AO and explained the return of income and the case was discussed with the Counsel of the assessee. During the assessment proceedings, the documents and details were also furnished which is mentioned in the assessment order. It was submitted that the Ld. AO has also not issued any further notices to the assessee to call for details, hence there was not any non-compliance of the statutory notices and the penalty should not be levied. The above explanation / submission is verifiable from the record and it is not an afterthought as has been alleged by the Ld. CIT(A). It was submitted that keeping in view the ITA- 118,119,120/CHD/2023 A.Y. 2011-12 38 factual position as explained above that counsel for the assessee attended the assessment proceedings, furnished the requisite information, the documents have been examined and discussed with the counsel for the assessee and no further notices have been issued by the learned AO to call for any detail, there is not any non-compliance of the statutory notices and also keeping in view that the penalty proceedings u/s 271(1)(b) have never been initiated for non-compliance of notice u/s 142(1) dated 24-8-2018, the penalty imposed u/s 271(1)(b) is not valid and may kindly be deleted 57. Per contra, ld. DR submitted that the decision of the Coordinate Delhi Benches in case of Globus Infocom Ltd. Vs DCIT is distinguishable on facts as in that case, the assessment was completed u/s 143(3) as against 147 r/w 144 in the instant case. Further, she has relied on the findings of the ld. CIT(A) which are contained at para 6 of the impugned order which reads as under : “6. Findings & Decision: It is necessary to reproduce the provisions of Section 271 (1 )(b) of the Income Tax Act, 1961 below for clarity: "271. Failure to furnish returns, comply with notices, concealment of income, etc. (1)(b) has failed to comply with a notice (under sub-section (2) of Section 115WD or under sub-section (2) of Section 115WE or) under sub-section (1) of Section 142 or sub-section (2) of Section 143 (or ITA- 118,119,120/CHD/2023 A.Y. 2011-12 39 fails to comply with a direction issued under sub-section 2A of Section 142) or He may direct such person shall pay by way of penalty, - (ii) in the cases referred to in clause (b), (in addition to tax, if any, payable) by him, a sum (of ten thousand rupees) for each such failure." 6.1 It is clear from bare reading of the above provisions that whether or not the penalty as envisaged in Section 271 (1 )(b) of the Act is to be imposed, is a matter to be determined by the Assessing Officer within the meaning of Section. He may direct such penalty to be paid and conversely, it would be correct to say, he may choose not to so direct tor such penalty to be paid. To determine whether the default was wilful or otherwise, the explanation offered, if any, by the appellant shall be imposed, inter-alia, u/s 271 (1 )(b), where the assessee establishes a reasonable cause for failure referred to in the said section. 6.2 In the instant case, it is very clear from the order on the grounds of appeal raised by the appellant that the* appellant did not respond to the notice issued u/s 142(1) dated 24.08.2018. Further, when the opportunity was provided through a show-cause notice requesting for the compliance on 19.11.2018, even for this show cause notice, the appellant did not respond. This fact is very clear from the detailed order passed in the case, whereas, in the submissions made the appellant has tried to explain that there was response from him at later stage, which is nothing but an afterthought. Therefore, the AO has rightly levied the penalty u/s 271 (1 )(b) of the Income Tax Act, 1961. 6.3 Admittedly, it is noticed that the Show cause notice was issued by the Assessing Officer on 19.11.2018 requesting the appellant assessee to explain the non-compliance was on 24.08.2018. The Assessing Officer has given a reasonable time and requested the appellant assessee to respond by 24.08.2018. Accordingly, it is held that the AO has rightly levied the penalty. 6.4 In view of the above discussion and the material available in the system, in the instant appeal, the undersigned find no merit and substance in the matter, and accordingly dismissed.” ITA- 118,119,120/CHD/2023 A.Y. 2011-12 40 58. We have heard the rival contentions and purused the material on record. The penalty u/s 271(1)(b) has been levied for non- compliance of notice u/s 142(1) dated 24/08/2018 wherein the AO had asked for certain specific information/documentation and the matter was scheduled for hearing on 4/09/2018. On the scheduled date of hearing, there was however no compliance on part of the assessee either in terms of furnishing the requisite information or seeking an adjournment in the matter. Thereafter, in response to the said notice and another notice dated 9/11/2018, the assessee furnished the information as available with him as per his submissions dated 14/11/2018 and 19/11/2018 and taking the same into consideration and after discussions with the Counsel of the assessee, the assessment was completed u/s 147 r/w 144 by the AO vide order dated 19/11/2018. We therefore find that though there has been initial non-compliance on part of the assessee in terms of not furnishing the requisite information within the stipulated timeframe, however, the information was subsequently furnished during the course of assessment proceedings and therefore, it is case of delayed compliance on part of the assessee and it cannot be said that there was lack of compliance on part of the assessee. ITA- 118,119,120/CHD/2023 A.Y. 2011-12 41 Considering the entirety of facts and circumstances of the case, the levy of penalty u/s 271(1)(b) is hereby directed to be deleted. 59. In the result, the appeal of the assessee is allowed. 60. In the result, appeal of the assessee in ITA No. 118/CHD/2023 is dismissed, ITA No. 119/CHD/2023 is allowed and ITA No. 120/CHD/2023 is allowed. Order pronounced in the open Court on 13 th July, 2023. Sd/- Sd/- आकाश द प जैन !व#म %संह यादव (AAKASH DEEP JAIN) ( VIKRAM SINGH YADAV) उपा(य) / VICE PRESIDENT लेखा सद+य/ ACCOUNTANT MEMBER Poonam आदेश क त)ल*प अ+े*षत/ Copy of the order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent 3. आयकर आय ु -त/ CIT 4. *वभागीय त न0ध, आयकर अपील"य आ0धकरण, च3डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड फाईल/ Guard File आदेशान ु सार/ By order, सहायक पंजीकार/ Assistant Registrar