Sumit Mittal, New Delhi V. DCIT Intl. Taxation, Gurgaon

ITA 5810/DEL/2019

AI Insights

The case involves an appeal by Sumit Mittal against the order of the CIT (Appeals)-43, New Delhi, which confirmed the penalty imposed by the Assessing Officer under section 271B for not furnishing a tax audit report under section 44AB of the Income-tax Act, 1961. The assessee argued that his gross receipts from Future and Option transactions were only Rs. 90,08,691, which he believed did not require a tax audit. However, the CIT (Appeals) and the Tribunal found that the total turnover, including all transactions, exceeded Rs. 1 crore, thus necessitating a tax audit.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 113970 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 07-12-2022
• Assessment Year: 2015-2016
• Appeal Filed On: 02-07-2019
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 271B; 44AB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH ‘G’ : NEW DELHI) SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER and SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER ITA No.5810/Del./2019 (ASSESSMENT YEAR : 2015-16) Sumit Mittal, vs. DCIT, International Taxation, 28, Kukhrain Apartment, Sector 13, Gurgaon. Rohini, Delhi – 110 085. (PAN : AJZPM2564K) (APPELLANT) (RESPONDENT) ASSESSEE BY : None REVENUE BY : Shri Abhishek Kumar, Sr. DR Date of Hearing : 08.12.2022 Date of Order : 05.01.2023 ORDER PER SHAMIM YAHYA, ACCOUNTANT MEMBER : This appeal by the assessee is directed against the order of the ld. CIT (Appeals)-43, New Delhi dated 06.05.2019 for the assessment year 2015-16. 2. The grounds of appeal taken by the assessee read as under :- “1. That having regard to the facts and circumstances of the case, Ld. CIT (A) has erred in law and on facts in confirming the action of ld. AO in levying penalty u/s 271B for not furnishing the tax audit report u/s 44AB. ITA No.5810/Del./2019 2 2. That having regard to the facts and circumstances of the case, Ld. CIT (A) has erred in law and on facts in confirming the applicability of section 44AB in the present case.” 3. In this case, Assessing Officer noted that total gross receipt of the assessee was 95,73,92,751/- thereby making him liable for tax audit under section 44AB of the Income-tax Act, 1961 (for short 'the Act'). Since it was not done penalty under section 271B of the Act was levied amounting to Rs.1,50,000/-. 4. Before the ld. CIT (A), in his submissions assessee stated that he has entered into only Future and Option transactions which resulted in gross receipt of Rs.90,08,691/-. Ld. CIT (A) noted that assessee had attached tabulated details of Future & Option transactions. He noted that however there are no details whatsoever with reference to how the figure of Rs.85.73 crores mentioned in the assessment order was incorrect and how the figure presently submitted is correct. Ld. CIT (A) opined that presumably assessee considered his receipt or payment only to the extent of 1% of the contract value entered into for the Future and Option transactions of any script. However, referring to section 44AB, ld. CIT (A) found that it was not correct. He referred to the provisions of section 44AB and thereafter held that proportion paid by the assessee for entering the contract worth Rs.100 may be 1% but that does not indicate that his turnover from the said contract is only 1% of the gross contract ITA No.5810/Del./2019 3 entered into. Therefore, ld. CIT (A) held that liability for tax audit which depends upon the total turnover, which in assessee’s case, certainly exceeded Rs.1 crore, existed. Hence, ld. CIT (A) confirmed the levy of penalty u/s 271B. 5. Against this order, assessee is in appeal before us. 6. Several notices have been issued to the assessee. Notices are returned unserved also. Hence we proceed to decide the issue by hearing ld. DR for the Revenue and perusing the records. 7. Upon careful consideration, we note that Revenue authorities found that assessee’s turnover is above the threshold limit to furnish the tax audit report. Admittedly, assessee has not obtained the same under a mistaken belief of his turnover as explained by ld. CIT (A) above. In these circumstances, in our considered opinion, there is no infirmity in the orders of the authorities below, hence we confirm the same. 8. In the result, this appeal filed by the assessee stands dismissed. Order pronounced in the open court on this 5 th day of January, 2023. Sd/- sd/- (CHANDRA MOHAN GARG) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated the 5 th day of January, 2023 TS ITA No.5810/Del./2019 4 Copy forwarded to: 1.Appellant 2.Respondent 3.CIT 4.CIT(A)-43, New Delhi. 5.CIT(ITAT), New Delhi. AR, ITAT NEW DELHI.