KARUPPANNAN THULASIMANI,ERODE V. ITO, WARD �(1) ERODE , ERODE

ITA 2444/CHNY/2024

AI Insights

The case involves Shri Karuppanan Thulasimani, a contractor, who faced penalties under Sections 271A and 271B for the assessment years 2014-15 to 2017-18. The penalties were imposed for non-maintenance of books of accounts and failure to get the accounts audited, respectively. The Assessing Officer (AO) had estimated the income due to non-maintenance of books and levied penalties accordingly. The Commissioner of Income Tax (Appeals) upheld these penalties, leading to the current appeals. The Tribunal's decision focused on the sequence of obligations under Sections 44AA and 44AB, concluding that the non-maintenance of books alone justified the penalty under Section 271A, but not under Section 271B as the books were not maintained to begin with.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 39236 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 20-11-2024
• Assessment Year: 2015-2016
• Appeal Filed On: 18-09-2024
• Other Referred Cases: Shri Balasingam Somasundaram vs. ACIT, Surajmal Parsuram Todi Vs. CIT
• Laws Referred To: Section 271A, Section 271B, Section 44AA, Section 44AB
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAVITHA LD
• Assessee Lawyers: S.SRIDHAR ERODE LD
• Section: 44AB; 271B

Judgement Text

" आयकर अपीलीय अिधकरण “डी” \u000eा यपीठ चे\u0013ई म\u0016। IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, CHENNAI मा ननीय \u0019ी मनोज क ुमा र अ\u001dवा ल ,लेखा सद# एवं मा ननीय \u0019ी मनु क ुमा र िग'र, \u000eा ियक सद# क े सम(। BEFORE HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM AND HON’BLE SHRI MANU KUMAR GIRI, JM 1. आयकरअपील सं ./ ITA No.2441/Chny/2024 (िनधा )रणवष) / Assessment Year: 2014-15) & 2. आयकरअपील सं ./ ITA No.2442/Chny/2024 (िनधा )रणवष) / Assessment Year: 2014-15) & 3. आयकरअपील सं ./ ITA No.2443/Chny/2024 (िनधा )रणवष) / Assessment Year: 2015-16) & 4. आयकरअपील सं ./ ITA No.2444/Chny/2024 (िनधा )रणवष) / Assessment Year: 2015-16) & 5. आयकरअपील सं ./ ITA No.2445/Chny/2024 (िनधा )रणवष) / Assessment Year: 2016-17) & 6. आयकरअपील सं ./ ITA No.2446/Chny/2024 (िनधा )रणवष) / Assessment Year: 2016-17) & 7. आयकरअपील सं ./ ITA No.2447/Chny/2024 (िनधा )रणवष) / Assessment Year: 2017-18) & 8. आयकरअपील सं ./ ITA No.2448/Chny/2024 (िनधा )रणवष) / Assessment Year: 2017-18) Shri Karuppanan Thulasimani 23C, Ganapathy Nagar, Mariyamman Kovil Street, Periyasemur, Erode-638 004. बना म/ Vs. ITO Ward-1(1), Erode. 2 \u0001थायीलेखासं./जीआइआरसं./PAN/GIR No.ADMPT-5801-H (अपीलाथ\u001c/Appellant) : (\u001f थ\u001c / Respondent) अपीलाथ\u001cकीओरसे/ Appellant by : Shri S. Sridhar (Advocate) Erode -Ld. AR \u001f थ\u001cकीओरसे/Respondent by : Ms. Kavitha (Addl.CIT) - Ld. DR सुनवाईकीतारीख/Date of Hearing : 20-11-2024 घोषणाकीतारीख /Date of Pronouncement : 20-11-2024 आदेश / O R D E R Per BENCH: 1. Aggrieved by confirmation of penalty u/s 271A & 271B for Rs.25,000/- & Rs.1.5 Lacs respectively for each of the Assessment Years (AYs) 2014-15 to 2017-18, the assessee is in further appeal before us. The impugned orders have been passed by learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] on 29-02-2024 in the matter of impugned penalties levied by Ld. Assessing Officer [AO] in its separate orders dated 19-09-2022. Facts leading to penalty are stated to be the same. 2. The registry has noted a delay of 142 days in the appeals, the condonation of which has been sought by Ld. AR on the strength of affidavit of the assessee. It has been stated that the quantum orders were in further appeals which got disposed-off subsequently to impugned orders after which the assessee decided to prefer the present appeals. Considering the contents of affidavit and period of delay, the delay is condoned and we proceed with disposal of the appeals. 3. The Ld. AR assailed levy of simultaneous penalty and referred to the decision of this Tribunal in Shri Balasingam Somasundaram vs. ACIT (ITA No.1199 & 1200/Chny/2023 dated 06-03-2024) in support of 3 its submissions. The Ld. Sr. DR, on the other hand, submitted that both the penalties could be levied simultaneously and therefore, the appeals are to be dismissed. The Ld. Sr. DR stated that non-maintenance of books of accounts and failure to get accounts audited are separate lapses for which the assessee could be visited with simultaneous penalties as per the provisions of Sec.271A and 271B. Having heard rival submissions and upon perusal of case records, our adjudication would be as under. 4. From penalty order of Ld. AO u/s 271B for AY 2014-15, it could be seen that the assessee derived contract receipts for Rs.513.96 Lacs. However, the assessee did not file return of income. The case was reopened and the assessee admitted income of Rs.10.46 Lacs. The Ld. AO estimated income of 8% in the absence of books of accounts. Consequently, penalty was levied u/s 271A for non-maintenance of books of accounts u/s 44AA. Another penalty was levied u/s 271B for failure to get the accounts audited u/s 44AB. In the absence of any response forthcoming from the assessee, Ld. AO levied penalty u/s 271A for Rs.0.25 Lacs and penalty u/s 271B for Rs.1.50 Lacs in each of the AYs. The assessee defended its stand during appellate proceedings. However, Ld. CIT(A) confirmed both the penalties against which the assessee is in further appeal before us. Similar are the facts in all the other years. 5. It is quite evident that the assessee is a contractor and considering its contractual receipts, it is not only required to maintain books of accounts but also get the same audited under law so as to enable Ld. AO to determine its correct income. Admittedly, the assessee has not maintained any books of accounts in the present case. Accordingly, 4 when there are no books, the question of getting the same audited would not arise at all. It could be seen that Ld. AO has framed the assessment on best judgment basis and estimated the income @8% only due to the fact that the assessee has not maintained any books of accounts. In our considered opinion, the maintenance of books is primary requirement. The books could be audited only when the same are maintained. When the books are not maintained, the question of getting them audited would not arise. As a natural corollary, the levy of penalty for non-maintenance of books could be justified but levy of penalty for not getting the books of accounts would be unfair. The Hon’ble Guwahati High Court, in the case of Surajmal Parsuram Todi Vs. CIT (222 ITR 691), held that maintenance of accounts is envisaged u/s 44AA and upon failure to do so, the assessee shall be guilty and liable to be penalized u/s 271A. Even after maintenance of books of account, the obligation of the assessee does not come to an end. He is required to do something more, i.e., by getting the books of account audited by an accountant. But when a person commits an offence by not maintaining the books of account as contemplated by Sec. 44AA, the offence is complete. After that, there could be no possibility of any offence as contemplated by Sec. 44AB and therefore, the imposition of penalty u/s 271B would be erroneous. This decision has been followed by various benches of the Tribunal including the cited decision of Chennai Tribunal as referred to by Ld. AR. Therefore, we confirm levy of penalty u/s 271A but delete penalty as levied u/s 271B, in all the years. The appeals stand disposed- off accordingly. 5 6. In the result, appeals ITA Nos.2441, 2443, 2445, 2447/Chny/2024 stand dismissed. The appeals in ITA Nos.2442, 2444, 2446, 2448/Chny/2024 stand allowed. Order pronounced on 20th November, 2024. Sd/- (MANU KUMAR GIRI) \u000eा ियक सद# / JUDICIAL MEMBER Sd/- (MANOJ KUMAR AGGARWAL) लेखा सद# / ACCOUNTANT MEMBER चे2ई Chennai; िदनांक Dated : 20.11.2024 DS आदेशकीIितिलिपअ\u001dेिषत/Copy of the Order forwarded to : 1. अपीलाथ\u001c/Appellant 2. \u001f थ\u001c/Respondent 3. आयकरआयु;/CIT, Coimbatore. 4. िवभागीय\u001fितिनिध/DR 5. गाड@फाईल/GF "