M/s. Bhagwati Constructions, Nashik V. Income-tax Officer,

ITA 2172/PUN/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8457 (ITAT-PUNE)
• Duration Of Justice: 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 16-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Assessee Lawyers: S S MUTHA
• Keywords: Business income; Reasonable cause; Revised return

Judgement Text

INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NOS. 2171 & 2172/PN/2013 (ASSESSMENT YEAR : 2009-10) M/S. BHAGWATI CONSTRUCTIONS, SANCHETI TOWERS, OPP : CIRCLE TALKIES, ASHOK STAMBH, NASHIK 01 .. APPLICANT PAN NO. AAEFB0816B VS. ITO-WARD-1(1), NASHIK .. RESPONDENT ASSESSEE BY : SHRI S.S. MUTHA DEPARTMENT BY : SHRI B.C. MALAKAR DATE OF HEARING : 29-10-2014 DATE OF PRONOUNCEMENT : 31-10-2014 ORDER PER R.K. PANDA, AM : THE ABOVE 2 APPEALS FILED BY THE ASSESSEE ARE DIREC TED AGAINST THE SEPARATE ORDERS DATED 22-11-2013 OF THE CIT(A)-I, NASHIK CONFIRMING LEVY OF PENALTY OF RS.25,000/- U/ S.271A OF THE I.T. ACT AND RS.1,13,631/- U/S.271B OF THE I.T. ACT RESPECTIVELY FOR THE A.Y. 2009-10. FOR THE SAKE OF CONVENIENCE, BOTH THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. ITA NO.2171/PN/2013 (A.Y. 2009-10) : 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF CIVIL C ONSTRUCTION. IT FILED ITS RETURN OF INCOME ON 23-09-2009 DECLARING TOTAL INCOME 2 OF RS.2,11,230/-. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S.143(3) ON A TOTAL INCOME OF RS.16,35 ,670/-. 2.1 IN THIS CASE A SURVEY ACTION U/S.133A OF THE I. T. ACT WAS CONDUCTED ON 24-09-2009 AND THEREAFTER THE ASSESSEE FIRM FILED A REVISED RETURN ON 23-01-2010 DECLARING TOTAL INCO ME AT RS.7,77,935/-. DURING THE COURSE OF ASSESSMENT PRO CEEDINGS, THE ASSESSING OFFICER NOTED THAT IN THE ORIGINAL RE TURN OF INCOME, THE ASSESSEE HAD SHOWN THE GROSS ANNUAL CONTRACT RE CEIPTS AT RS.2,27,26,211/- WHICH HAS GONE DOWN TO RS.1,90,76, 845/- IN THE REVISED RETURN. HE FURTHER NOTED THAT DURING T HE COURSE OF ASSESSMENT PROCEEDINGS IT WAS SPECIFICALLY ASKED TO THE ASSESSEE REGARDING MAINTENANCE OF BOOKS OF ACCOUNT TO WHICH IN ITS SUBMISSION DATED 24-08-2011 THE ASSESSEE HAD STATED THAT IT HAS NOT MAINTAINED REGULAR BOOKS OF ACCOUNT DURING THE YEAR UNDER REVIEW BECAUSE OF MIS-GUIDANCE OF EARLIER CHA RTERED ACCOUNTANT WHO HAD UNDERTAKEN THE RESPONSIBILITY TO MAINTAIN THE RELEVANT RECORD AS WELL AS STATUTORY COMPLIANCE . SINCE THE ASSESSEE FIRM HAS NOT MAINTAINED BOOKS OF ACCOUNT A ND NOT PRODUCED BEFORE THE ASSESSING OFFICER SUCH BOOKS OF ACCOUNT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER ISSUED A NOTICE U/S.274 R.W.S. 271A OF THE I.T. ACT ASKING THE ASSESSEE TO EXPLAIN AS TO WHY PENALTY U/S.271A SHALL NOT BE INITIATED. HOWEVER, THERE WAS NO COMPLIANCE TO THI S STATUTORY NOTICE. THE ASSESSING OFFICER FURTHER NOTED THAT S IMILAR PENALTY PROCEEDINGS U/S.271A OF THE I.T. ACT WERE INITIATED AND PENALTY LEVIED IN CASE OF THE ASSESSEE FOR A.YRS. 2007-08 A ND 2008-09 RESPECTIVELY ON ACCOUNT OF NON-MAINTENANCE OF REGUL AR BOOKS OF ACCOUNT IN RESPECT OF ITS BUSINESS ACTIVITIES. THE SUBMISSION OF THE ASSESSEE IN THOSE YEARS WERE NOT ACCEPTED BY TH E ASSESSING 3 OFFICER AND PENALTY U/S.271A WAS LEVIED. THE ASSES SING OFFICER, THEREFORE, LEVIED PENALTY OF RS.25,000/- U/S.271A F OR NON- MAINTENANCE OF BOOKS OF ACCOUNT. 3. BEFORE CIT(A) IT WAS SUBMITTED THAT THE ASSESSEE FIRM HAS FILED THE REVISED RETURN OF INCOME ON 23-09-2009 DE CLARING INCOME AT RS.2,11,230/- ON THE BASIS OF AUDITED FIN ANCIAL STATEMENTS OF ACCOUNTS AS WELL AS BOOKS OF ACCOUNTS WHICH WERE PREPARED UNDER THE SUPERVISION OF AN AUDITOR ONE MR . MADHUKAR TILE WHO WAS GIVEN THE RESPONSIBILITY OF LOOKING AF TER THE ACCOUNTS, AUDIT, TAXATION ETC., BECAUSE OF THE SURV EY ACTION IN THE BUSINESS PREMISES OF THE ASSESSEE FIRM ON 25-09 -2009, THE ASSESSEE CAME TO KNOW ABOUT THE WRONG DOING BY THE CHARTERED ACCOUNTANT. THEREAFTER, THE ASSESSEE CHANGED THE A UDITOR AND APPOINTED NEW AUDITOR, WHO PREPARED THE BOOKS OF AC COUNT ON THE BASIS OF ACTUAL EVIDENCES AND FACTS AND THEREAF TER REVISED RETURN WAS FILED ON THE BASIS OF SUCH RE-CASTED FIN ANCIAL STATEMENT. IT WAS SUBMITTED THAT ALTHOUGH WRONG BU T THE ASSESSEE HAS MAINTAINED BOOKS OF ACCOUNT WHICH WERE AUDITED AND THEREFORE THE PROVISION OF LAW HAS BEEN APPLIED WITH. IT WAS FURTHER SUBMITTED THAT THE I.T. RULES HAS NOT PRESC RIBED ANY PARTICULAR ACCOUNTS TO BE MAINTAINED. THE ASSESSEE HAS FURNISHED COMPLETE INFORMATION SO AS TO ENABLE THE ASSESSING OFFICER TO COMPLETE THE ASSESSMENT. THE ASSESSEE H AS FURNISHED COMPLETE DETAILS OF FIXED ASSETS, LOANS AND ADVANCE S, BANK ACCOUNTS, CASH DEPOSITS OF CONTRACT AMOUNTS, TDS, D EPOSITS, CAPITAL ACCOUNT OF PARTNERS, BORROWERS, UNSECURED L OANS WITH CONFIRMATIONS, PROVISIONS ETC., RELYING ON VARIOUS DECISIONS, IT WAS ARGUED THAT NO PENALTY U/S.271A IS LEVIABLE. I T WAS ALSO BROUGHT TO THE NOTICE OF THE CIT(A) THAT THE ASSESS MENT IN THE 4 PRESENT CASE HAS BEEN COMPLETED U/S.143(3), THAT TO O ON THE BASIS OF DETAILED SUBMISSION OF THE ASSESSEE. 4. HOWEVER, THE LD.CIT(A) WAS NOT SATISFIED WITH TH E EXPLANATION GIVEN BY THE ASSESSEE AND CONFIRMED THE PENALTY OF RS.25,000/- BY OBSERVING AS UNDER : 4.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE, THE PENALTY ORDER AS WELL AS WRITTEN SUBMISSIONS ON BEHALF OF T HE APPELLANT AND RELEVANT JUDICIAL PRONOUNCEMENTS CITED. THOUGH IT I S STATED THAT THE APPELLANT WAS COMPLETELY DEPENDENT ON MR. MADHUKAR TILE, CHARTERED ACCOUNTANT FOR MAINTENANCE OF ACCOUNTS AS WELL AS AUDIT THEREOF, THE APPELLANT FIRM CANNOT ABSOLVE ITSELF F ROM THE STATUTORY OBLIGATION OF MAINTAINING THE REGULAR BOOKS OF ACCO UNT. IT IS AN UNDISPUTED FACT THAT THE APPELLANT WAS REQUIRED TO MAINTAIN BOOKS OF ACCOUNT AS PER PROVISIONS OF THE ACT TO ENABLE THE AO TO COMPUTE ITS TOTAL INCOME IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT. THE RELEVANT PROVISION OF SEC.44AA IS REPRODUCED AS UND ER : 44AA(1) EVERY PERSON CARRYING ON LEGAL, MEDICAL, EN GINEERING OR ARCHITECTURAL PROFESSION OR THE PROFESSION OF ACCOU NTANCY OR TECHNICAL CONSULTANCY OR INTERIOR DECORATION OR ANY OTHER PRO FESSION AS IS NOTIFIED BY THE BOARD IN THE OFFICIAL GAZETTE 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. (2) EVERY PERSON CARRYING ON BUSINESS OR PROFESSION F NOT BEING A PROFESSION REFERRED TO IN SUB-SECTION (1) SHALL, - (I) IF HIS INCOME FROM BUSINESS OR PROFESSION EXCEE DS ONE LAKH TWENTY] THOUSAND RUPEES OR HIS TOTAL SALES, TURNOVE R OR GROSS RECEIPTS, AS THE CASE MAY BE, IN BUSINESS OR PROFESSION EXCEE D OR EXCEEDS [TEN LAKH RUPEES IN ANY ONE OF THE THREE YEARS IMMEDIATE LY PRECEDING THE PREVIOUS YEAR; OR (II) WHERE THE BUSINESS OR PROFESSION IS NEWLY SET UP IN ANY PREVIOUS YEAR IF HIS INCOME FROM BUSINESS OR PROFESSION IS L IKELY TO EXCEED [ ONE LAKH TWENTY] THOUSAND RUPEES OR HIS TOTAL SALES , TURNOVER OR GROSS RECEIPTS, AS THE CASE MAY BE, IN BUSINESS OR PROFESSION ARE OR IS LIKELY TO EXCEED [TEN LAKH] RUPEES, (DURING S UCH PREVIOUS YEAR) IT IS ALSO AN UNDISPUTED FACT THAT THE REGULAR BOOK S OF ACCOUNT IN RESPECT OF THE RETURN OF INCOME, ON THE BASIS OF WH ICH THE ASSESSMENT WAS COMPLETED, ARE NOT MAINTAINED BY THE APPELLANT. THE APPELLANT HAS NOT BROUGHT ON RECORD ANY REASONA BLE CAUSE FOR NON MAINTENANCE OF BOOKS OF ACCOUNT. IN A.YS. 2007- 08 AND 2008- 09 ALSO PENALTY U/S 271A WAS LEVIED FOR NON-MAINTEN ANCE OF BOOKS OF ACCOUNT AS PER THE REQUIREMENT U/S 44AA OF THE A CT. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE A.O. IS JU STIFIED IR IMPOSING THE PENALTY OF RS. 25.000/- U/S 271A FOR NOT COMPLYING WITH THE PROVISIONS OF SECTION 44AA OF THE ACT. THE SAME IS HEREBY CONFIRMED. 5. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSE SSEE IS IN APPEAL BEFORE US. 5 6. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SAME ARGUMENTS AS MADE BEFORE THE CIT(A). HE SUBMITTED THAT THE ASSESSMENT IN THE INSTANT CASE HAS BEEN COMPLETED U /S.143(3) ON THE BASIS OF THE VARIOUS DETAILS FURNISHED BY TH E ASSESSEE. THE PENALTIES LEVIED U/S.271A FOR THE A.YS. 2007-08 AND 2008-09 WERE DELETED BY THE CIT(A) AND THE REVENUE HAS NOT PREFERRED ANY APPEAL. AS REGARDS THE CONTRACT RECEIPT IS CONC ERNED, HE SUBMITTED THAT IN THE ORIGINAL RETURN THE ASSESSEE HAS DECLARED GROSS CONTRACT RECEIPT OF RS.2,27,26,211/- WHICH HA S GONE DOWN TO RS.1,90,76,845/- IN THE REVISED RETURN. ALTHOUG H THE ASSESSING OFFICER HAD ESTIMATED THE PROFIT AT 15% O N THE GROSS RECEIPT OF RS.2.27 CRORES THE LD.CIT(A) HAS ACCEPTE D THE CONTRACT RECEIPT OF RS.1.91 CRORES IN THE REVISED RETURN AND FURTHER REDUCED THE G.P. RATE TO 10% ON THE SAID CONTRACT R ECEIPT OF RS.1.91 CRORES AND THE REVENUE HAS NOT FILED ANY AP PEAL AGAINST THE ORDER OF THE CIT(A). HE FURTHER SUBMITTED THAT THE I.T. RULES DO NOT PRESCRIBE SPECIFIC BOOKS OF ACCOUNT TO BE MA INTAINED FOR PERSONS ENGAGED IN THE BUSINESS. IT HAS ONLY PRESC RIBED BOOKS OF ACCOUNTS FOR PROFESSIONALS SUCH AS LAWYERS, DOCT ORS AND CHARTERED ACCOUNTANTS ETC. THE ASSESSEE HAS MAINTAI NED AND SUBMITTED BEFORE THE ASSESSING OFFICER THE DETAILS WHICH WOULD HAVE ENABLED THE ASSESSING OFFICER TO DETERMINE THE CORRECT PROFIT. UNDER THESE CIRCUMSTANCES, LEVY OF PENALTY U/S.271A IS NOT JUSTIFIED. HE ACCORDINGLY SUBMITTED THAT THE P ENALTY SO LEVIED BY THE ASSESSING OFFICER AND UPHELD BY THE CIT(A) S HOULD BE DELETED. 6.1 REFERRING TO THE DECISION OF THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF SMT. RAJANI VS. ITO REPORTED IN 91 T TJ 26 HE 6 SUBMITTED THAT UNDER SOMEWHAT SIMILAR CIRCUMSTANCES THE PENALTY LEVIED U/S.271A BY THE ASSESSING OFFICER AN D UPHELD BY THE CIT(A) WAS CANCELLED BY THE TRIBUNAL. 7. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE CIT(A). HE SUBM ITTED THAT DURING THE COURSE OF SURVEY PROCEEDINGS THE ASSESSE E HAD CATEGORICALLY STATED THAT IT HAS NOT MAINTAINED REG ULAR BOOKS OF ACCOUNT DUE TO MIS-GUIDANCE OF THE CHARTERED ACCOUN TANT, THEREFORE, HE CANNOT NOW TAKE A DIFFERENT STAND. FU RTHER, THE INCOME IN THE REVISED RETURN WAS FILED ON ESTIMATE BASIS. HE ACCORDINGLY SUBMITTED THAT THE ORDER OF THE LD.CIT( A) BE UPHELD. 8. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND IN THE INSTANT CASE THE ASSESSEE HAD FILED THE RETURN OF INCOME ORIGINALLY ON 23-09-2009 DECLARING TOTAL INCOME OF RS.2,11,230/-. AFTER THE SURVEY ON 24-09-2009, THE ASSESSEE FILED REVISED RETURN ON RS.23-01-2010 DECLARING TOTAL INCOME OF R S.7,77,935/. IN THE REVISED RETURN THE GROSS CONTRACT RECEIPT HA S BEEN SHOWN AT RS.1,90,76,845/- AS AGAINST THE CONTRACT RECEIPT OF RS.2,27,26,211/- IN THE ORIGINAL RETURN. DURING TH E COURSE OF ASSESSMENT PROCEEDINGS ON BEING ASKED BY THE ASSESS ING OFFICER TO PRODUCE REGULAR BOOKS OF ACCOUNT MAINTAINED IN I TS BUSINESS ACTIVITIES, IT WAS SUBMITTED BY THE AUTHORISED REPR ESENTATIVE THAT BOOKS OF ACCOUNTS HAVE NOT BEEN MAINTAINED BY THE A SSESSEE AND THE RETURN HAS BEEN FILED ON ESTIMATE BASIS U/S .44AD OF THE I.T. ACT. IT IS AN UNDISPUTED FACT THAT THE GROSS CONTRACT RECEIPTS 7 ARE EXCEEDING RS.40 LAKHS. THEREFORE, WHEN THE ASS ESSEE IN THE REVISED RETURN ESTIMATES ITS PROFIT U/S.44AD AT 10% , DENIED DURING THE ASSESSMENT PROCEEDINGS TO HAVE MAINTAINE D ANY BOOKS OF ACCOUNT, THEREFORE, THE ASSESSEE IN OUR OP INION HAS VIOLATED THE PROVISIONS OF SECTION 44AA AND THEREFO RE THE ASSESSEE IS LIABLE FOR PENALTY U/S.271A OF THE I.T. ACT. 8.1 AS PER THE PROVISIONS OF SECTION 44AA IF ANY PE RSON IS CARRYING ON ANY BUSINESS OTHER THAN PROFESSIONALS, SUCH AS DOCTORS, LAWYERS, CHARTERED ACCOUNTANTS ETC., HE IS REQUIRED TO KEEP AND MAINTAIN SUCH BOOKS OF ACCOUNT AND OTHER D OCUMENTS SO AS TO ENABLE THE ASSESSING OFFICER TO COMPUTE TH E TOTAL INCOME IN ACCORDANCE WITH THE PROVISIONS OF THIS AC T. THE ASSESSEE IN THE INSTANT CASE HAS FAILED TO KEEP AND MAINTAIN SUCH BOOKS OF ACCOUNT SO AS TO ENABLE THE ASSESSING OFFI CER TO DETERMINE THE CORRECT PROFIT. THE FILING OF THE RE VISED RETURN ESTIMATING THE PROFIT U/S.44AD ITSELF GOES TO SHOW THAT THE ASSESSEE HAS NOT MAINTAINED ANY BOOKS OF ACCOUNT. UNDER THESE CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THA T IT IS A FIT CASE FOR LEVY OF PENALTY U/S.271A OF THE I.T. ACT. 8.2 SO FAR AS THE DECISION OF THE DELHI BENCH OF TH E TRIBUNAL IN THE CASE OF SMT. RAJANI (SUPRA) IS CONCERNED, WE FI ND THE ASSESSEE HAS MAINTAINED CERTAIN DETAILS ON THE BASI S OF WHICH THE BALANCE SHEETS WERE DRAWN FOR THE PRECEDING YEAR AS WELL AS THE ASSESSMENT YEAR AND THE ASSESSEE WAS DECLARING INCO ME BY COMPARING INCREASE OF ASSETS OVER THOSE IN THE LAST YEAR. HOWEVER, IN THE INSTANT CASE, THE ASSESSEE HAS NOT DONE SO AND PROFIT HAS BEEN DECLARED U/S.44AD ON ESTIMATE BASIS . THEREFORE, THE SAID DECISION IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE 8 AND IS DISTINGUISHABLE. SO FAR AS THE ARGUMENTS OF THE LD. COUNSEL FOR THE ASSESSEE THAT PENALTY LEVIED IN THE PRECEDING YEAR WAS DELETED BY CIT(A) AND REVENUE HAS NOT PREF ERRED ANY APPEAL, WE FIND THE PENALTY LEVIED WAS ONLY RS.25,0 00/- EACH WHICH IS BELOW THE PRESCRIBED LIMIT OF FILING APPEA L BY REVENUE BEFORE THE TRIBUNAL. FURTHER, EACH ASSESSMENT YEAR IS SEPARATE. IN THIS VIEW OF THE MATTER AND IN VIEW OF THE DETAI LED REASONING GIVEN BY THE LD.CIT(A), WE FIND NO INFIRMITY IN THE ORDER OF THE LD.CIT(A). WE ACCORDINGLY UPHOLD THE SAME AND THE GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. ITA NO.2172/PN/2013 (A.Y. 2009-10) : 9. THE ONLY EFFECTIVE GROUND RAISED BY THE ASSESSEE READS AS UNDER: ON THE BASIS OF FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND AS PER LAW, THE CIT(A)-I, NASHIK IS NOT JUSTIFIED I N CONFIRMING THE PENALTY OF RS.1,13,631/- U/S.271B OF THE ACT. 9.1 AFTER HEARING BOTH THE SIDES, WE FIND THE ASSES SING OFFICER LEVIED PENALTY OF RS.1,13,631/- U/S.271B OF THE I.T . ACT ON THE GROUND THAT THE ASSESSEE HAS NOT FILED THE AUDIT RE PORT US/.271B OF THE I.T. ACT. IN APPEAL THE LD.CIT(A) UPHELD TH E PENALTY SO LEVIED BY OBSERVING AS UNDER : 4.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE, THE ORDER LEVYING PENALTY U/S. 271B, ORAL AS WELL AS WRITTEN SUBMISSIONS ON BEHALF OF THE APPELLANT AND RELEVANT JUDICIAL PRONO UNCEMENTS ON THE ISSUE. IT IS AN UNDISPUTED FACT THAT THE APPELL ANT HAS NEITHER MAINTAINED BOOKS OF ACCOUNT U/S 44AA NOR GOT THE BO OKS AUDITED U/S 44AB OF THE ACT FOR THE YEAR UNDER APPEAL. FOR NON- MAINTENANCE OF BOOKS OF ACCOUNT, THE AO HAS ALSO IM POSED PENALTY U/S. 271A. THE APPELLANT'S CONTENTION THAT SINCE THE AO HAS LEVIED PENALTY U/S 271A OF THE ACT, PENALTY U/S 271B FOR NOT GETTING THE BOOKS OF ACCOUNT AUDITED U/S 44AB IS NO T LEVIABLE HAS NO FORCE. THE HON'BLE ITAT PUNE IN RECENT JUDGEMENT DATED 07/06/2013 IN THE CASE OF SHRI ANIL GANESHMAL JAIN VS. DCIT IN I.T.A. NO.731 TO 739/PN/2012 FOR A.YS. 2001-02 TO 2 008-09 HAS HELD THAT PENALTY U/S 271A AND PENALTY U/S 271B ARE UNDER TWO 9 DIFFERENT PROVISIONS. THE APPELLANT'S CONTENTION TH AT IT DID NOT MAINTAIN THE BOOKS OF ACCOUNT BECAUSE OF THE FAULT OF C.A. IS ALSO NOT ACCEPTABLE AS IN THE EARLIER YEARS ALSO IT NEIT HER MAINTAINED THE BOOKS OF ACCOUNT NOR GOT THE SAME AUDITED U/S 4 4AB OF THE ACT. THE APPELLANT IN THE INSTANT CASE HAS COMMITTE D A DEFAULT U/S 44AB AS HIS ANNUAL CONTRACT RECEIPT (RS.1,90,76 ,845/- ) WAS MORE THAN THE PRESCRIBED LIMIT U/S 44AB OF THE ACT. THE APPELLANT HAS FAILED TO FURNISH ANY REASONABLE CAUSE FOR VIOL ATING THE PROVISIONS OF SEC.44AB OF THE ACT. HENCE, THE APPE LLANT WAS LIABLE FOR PENALTY U/S.271B OF THE I.T. ACT. IN VI EW OF THE ABOVE PENALTY LEVIED BY THE AO U/S.271B OF THE I.T. ACT I S CONFIRMED. 10. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASS ESSEE IS IN APPEAL BEFORE US. 11. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. AS HAS BEEN MENTIONED EARLIER IN THE PRECEDING PARAS WHILE DISC USSING ITA NO.171/PN/2013, IT WAS NOTED THAT THE ASSESSEE DOES NOT MAINTAIN ANY BOOKS OF ACCOUNT. ALTHOUGH DURING THE COURSE OF SURVEY AN AUDIT REPORT WAS IMPOUNDED, HOWEVER, THE SAME WAS PREPARED ON THE BASIS OF SOME IMAGINARY FIGURES AS ACCEPTED BY THE ASSESSEE AND DOES NOT REFLECT THE TRUE AND CORR ECT AFFAIRS OF THE ASSESSEE FIRM. THE INCOME IN THE REVISED RETUR N FILED BY THE ASSESSEE WAS ON ESTIMATE BASIS. THEREFORE, IT IS A N ADMITTED FACT THAT THE ASSESSEE DOES NOT MAINTAIN ANY BOOKS OF AC COUNT FOR WHICH SEPARATE PENALTY PROCEEDINGS WERE INITIATED A ND PENALTY WHICH HAS BEEN UPHELD BY THE CIT(A) WAS CONFIRMED B Y US IN THE PRECEDING PARAGRAPHS. THEREFORE, THE QUESTION OF G ETTING THE SAME AUDITED DOES NOT ARISE. WHEN NO BOOKS OF ACCO UNT ARE MAINTAINED IT IS NOT POSSIBLE FOR ANY AUDITOR TO AU DIT THE ACCOUNTS OF THE ASSESSEE. THEREFORE, THE ASSESSEE IN THE IN STANT CASE CANNOT BE PENALISED U/S.271B WHEN HE HAS ALREADY BE EN PENALISED U/S.271A OF THE I.T. ACT. 10 12. WE FIND AN IDENTICAL ISSUE HAD COME UP BEFORE T HIS BENCH OF THE TRIBUNAL IN THE CASE OF SHRI ILIYAS BADSHAH SHAIK VIDE ITA NOS. 2124 TO 2129/PN/2013 ORDER DATED 29-10-2014 FO R A.YRS. 2003-04 TO 2008-09 (WHERE BOTH OF US ARE PARTIES). IN THAT CASE ALSO, PENALTIES U/S.271A AND 271B WERE UPHELD BY TH E CIT(A). WHEN THE MATTER CAME UP BEFORE THE TRIBUNAL, THE TR IBUNAL DELETED THE PENALTY BY OBSERVING AS UNDER : 9. WE HAVE CONSIDERED THE ARGUMENTS ADVANCED BY TH E LD. DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIA L ON RECORD. IN THE INSTANT CASE, ADMITTEDLY NO BOOKS O F ACCOUNT WERE MAINTAINED FOR WHICH PENALTY U/S.271A HAS BEEN LEVIED BY THE AO. THEREFORE, WHEN NO BOOKS OF ACCOUNT ARE MA INTAINED, IT IS NOT POSSIBLE FOR ANY AUDITOR TO AUDIT THE ACCOUN TS OF THE ASSESSEE. AUDIT OF ACCOUNTS WOULD ARISE ONLY WHEN THE BOOKS OF ACCOUNTS ARE MAINTAINED. THEREFORE, IN OUR CONSIDE RED OPINION, PENALTY US.271B IN THE INSTANT CASE SHOULD NOT HAVE BEEN LEVIED FOR NOT GETTING THE ACCOUNTS AUDITED. 9.1 WE FIND THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF S.K. GUPTA AND CO., REPORTED IN 322 ITR9 86 HAS OBS ERVED AS UNDER: WE HAVE HEARD SRI A.N. MAHAJAN, LEARNED STANDING COUNSEL FOR THE REVENUE AND SRI R.R. KAPOOR, LEARNE D COUNSEL APPEARING FOR THE RESPONDENT ASSESSEE. SRI MAHAJAN CONTENDED THAT THE TRIBUNAL HAS ERRED I N LAW WHILE UPHOLDING ORDER OF THE COMMISSIONER OF INCOME -TAX (APPEALS) CANCELLING THE PENALTY INASMUCH AS THE ASSESSEE HAD FAILED TO GET ITS BOOKS OF ACCOUNT AUD ITED. THE SUBMISSION OF SRI MAHAJAN IS MISCONCEIVED FOR T HE REASON THAT THE REQUIREMENT OF GETTING THE BOOKS OF ACCOUNT AUDITED COULD ARISE ONLY WHERE THE BOOKS OF ACCOUNTS ARE MAINTAINED. IF FOR SOME REASON THE AS SESSEE HAS NOT MAINTAINED THE BOOKS OF ACCOUNT THE APPROPR IATE PROVISION UNDER WHICH PENALTY PROCEEDINGS CAN BE INITIATED IS UNDER SECTION 271A OF THE ACT WHICH RE COURSE HAS ALSO BEEN TAKEN BY THE ASSESSEE AS WOULD APPEAR FROM THE ORDER OF THE TRIBUNAL. THE TRIBUNAL WAS, THEREFORE, JUSTIFIED IN UPHOLDING THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) CANCELLING THE PENALTY IMPOSED UNDER SECTION 271B O F THE ACT. THE APPEALS FAILS AND IS, THEREFORE, DISMISSED. 9.2 WE FIND THE HONBLE GUWAHATI HIGH COURT IN THE CASE OF SURAJMAL PARSURAM TODI VS. CIT ORDER DATED 06-08-1 996 REPORTED IN 222 ITR 691 HAS HELD AS UNDER: 11 WE HAVE GONE THROUGH THE PROVISIONS OF SECTIONS 44 AA, 44AB, 271A AND 271B OF THE ACT. MAINTENANCE OF ACCO UNTS IS ENVISAGED UNDER SECTION 44AA AND ON FAILURE TO D O SO THE ASSESSEE SHALL BE GUILTY AND LIABLE TO BE PENAL ISED UNDER SECTION 271A. EVEN AFTER MAINTENANCE OF BOOKS OF ACCOUNT THE OBLIGATION OF THE ASSESSEE DOES NOT COM E TO AN END. HE IS REQUIRED TO DO SOMETHING MORE, I.E., BY GETTING THE BOOKS OF ACCOUNT AUDITED BY AN ACCOUNTA NT. BUT WHEN A PERSON COMMITS AN OFFENCE BY NOT MAINTAI NING THE BOOKS OF ACCOUNT AS CONTEMPLATED BY SECTION 44A A THE OFFENCE IS COMPLETE. AFTER THAT THERE CAN BE NO POSSIBILITY OF ANY OFFENCE AS CONTEMPLATED BY SECTI ON 44AB AND, THEREFORE, IN OUR OPINION, THE IMPOSITION OF PENALTY UNDER SECTION 271B IS ERRONEOUS. THE TRIBUN AL HAS OVERLOOKED THIS ASPECT OF THE MATTER. OF COURSE, IT IS APPARENT FROM THE RECORDS THAT THE ASSESSEE FAILED TO MAINTAIN THE BOOKS OF ACCOUNT AS REQUIRED UNDER SEC TION 44AA AND FOR THAT PENALTY IS PRESCRIBED UNDER SECTI ON 271A. IT IS FOR THE TRIBUNAL TO TAKE ACTION IN ACCO RDANCE WITH LAW. 9.3 WE FIND THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF REPORTED IN 299 ITR 219 HAS OBSERVED AS UNDER (SHOR T NOTES): A PENALTY PROVISION IN A TAXING STATUTE HAS TO BE STRICTLY CONSTRUED. PENALTY IS EXIGIBLE ONLY WHERE A PERSON FALLS WITHIN THE FOUR CORNERS OF THE PENAL PROVISIONS, OT HERWISE NOT. SEPARATE PENALTY HAS BEEN PROVIDED FOR NON-MAINTENA NCE OF ACCOUNTS, I.E. UNDER SECTION 271A OF THE INCOME- TAX ACT, 1961, AND FOR NOT GETTING THE ACCOUNTS AUDITED AND NOT FURNISHING THE AUDIT REPORT, I.E. UNDER SECTION 271B. IF A PERSON HAS NOT MAINTAINED ACCOUNT BOOKS OR ANY ACCOUNTS THE QUESTION OF AUDIT DOES NOT ARISE. IN SUCH AN EVENT THE IMPOSITION OF PENALTY UNDER THE PROVISION CONTAINED IN SECTION 271A FOR ALLEGED NON-COMPLIANC E WITH SECTION 44AA MAY ARISE BUT THE PROVISIONS OF SECTIO N 44AB DO NOT GET VIOLATED IN A CASE WHERE ACCOUNTS HAVE N OT BEEN MAINTAINED AT ALL AND THEREFORE THE PENAL PROV ISIONS OF SECTION 271B OF THE ACT WOULD NOT APPLY. 9.4 SO FAR AS THE ARGUMENT OF THE LD. DEPARTMENTAL REPRESENTATIVE THAT IN VIEW OF THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ANIL GANESHMAL JAIN THE PENALTY U/S.271B SHOULD BE UPHELD, WE FIND THE SAME IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN THAT CASE, THE A O HAS NOT LEVIED PENALTY U/S.271A. HOWEVER, IN THE INSTANT C ASE, PENALTY HAS BEEN LEVIED U/S.271A FOR NON-MAINTENANCE OF BOO KS OF ACCOUNT. MOREOVER, THE DECISIONS OF THE VARIOUS HI GH COURTS CITED (SUPRA) WOULD PREVAIL OVER THE DECISION OF TH E TRIBUNAL. IN THIS VIEW OF THE MATTER AND CONSIDERING THE FACT TH AT THE AO HAS ALREADY LEVIED PENALTY U/S.271A FOR NON MAINTENANCE OF BOOKS OF ACCOUNTS, WE HOLD THAT LEVY OF PENALTY U/S.271B FOR THE IMPUGNED ASSESSMENT YEAR IS NOT JUSTIFIED. ACCORDI NGLY, THE SAME IS DIRECTED TO BE DELETED AND THE GROUND RAISE D BY THE ASSESSEE IS ALLOWED. 12 12.1 SINCE IN THE INSTANT CASE PENALTY U/S.271A HAS BEEN UPHELD FOR NON-MAINTENANCE OF BOOKS OF ACCOUNT, THEREFORE, FOLLOWING THE DECISION OF THE TRIBUNAL CITED (SUPRA), WE ARE OF THE CONSIDERED OPINION THAT NO PENALTY U/S.271B IS LEVI ABLE. ACCORDINGLY, THE SAME IS CANCELLED. 13. IN THE RESULT, ITA NO.2171/PN/2013 FILED BY THE ASSESSEE IS DISMISSED AND ITA NO.2172/PN/2013 FILED BY THE ASSE SSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 31-10-2014. SD/- SD/- (R.S. PADVEKAR) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE DATED: 31 ST OCTOBER, 2014 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. CIT(A)-I, NASHIK 4. CIT-I, NASHIK 5. THE D.R, A PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // ASSISTANT REGISTRAR, ITAT, PUNE BENCHES, PUNE