ITAT Upholds Imposition of Penalty u/s 271B of Income Tax Act due to Non Audit of Books of Account [Read Order]

The Pune bench of the Income Tax Appellate Tribunal ( ITAT) upheld the imposition of penalty by the assessing officer under section 271B of the Income Tax Act,1961 due to non-audit of books of account. 

Rupa Sanjay Nigade, the appellant assessee was an owner of a proprietorship concern in the name and style of M/s Atharva Enterprises. The assessee appealed against the order passed by the National Faceless Appeal Centre( NFAC) for confirming the penalty order passed by the assessing officer under section 271B of the Income Tax Act. 

M.K. Kulkarni, the counsel for the assessee contended that the assessee does not maintain the books of accounts and that it was a prerequisite condition that the appellant had to maintain books of account for audit and therefore section 271B of the Income Tax Act was not applicable and not liable to be audited under section 44AB of the Income Tax Act. 

Shashank Deogadkar, the counsel for the department contended that according to section 44AA (2) of the Income Tax Act, concerning any other persons engaged in any other profession or carrying on any business other than section 44AA (1) of the Income Tax Act the requirement of compulsory maintenance of books of accounts applies if either the income from business or the turnover or gross receipts exceed Rs 10 Lakhs in any one of the three years immediately preceding the previous year. 

It was also submitted that the assessee had not been able to also prove why she was not required to maintain books of account and had failed to offer any reasonable cause for non-imposition of penalty. 

The two-member bench comprising Satbeer Singh Godara(Judicial) and Dr. Dipak P. Ripote (Accountant) held that the income of the assessee exceeds the prescribed threshold limit of Rs.1 crore mandatory for maintaining the books of account under section 44AB of the Income Tax Act and liable to be audited under section 44AB of the Income Tax Act while dismissing the appeal filed by the assessee. 

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