The Delhi bench of Income Tax Appellate Tribunal (ITAT) held that, if the assessee was not guilty of non-maintaining of books of accounts, the presumption would be that he shall not required to maintain the books of accounts and directed the Assessing authority to delete the penalty.
The assessee Sh.Taranjeet Singh Alagh in this case contended that the assessment was framed on returned income ignoring the capital loss of Rs. 45,38,988 it was not claimed by the assessee in his return of income.
The Assessing Officer initiated the penalty proceedings under Section 271A of Income Tax Act, 1961 for non-maintaining the books of accounts, as well as under Section 271A of Income Tax Act for not complying with the provisions of Section 44AB of the Income Tax Act.
Aggrieved by the order assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT (A)].
The CIT(A), after considering the submissions of the assessee, the penalty proceedings initiated under Section 271A of Income Tax Act was dropped but the penalty under Section 271A of Income Tax Act as imposed by the AO was sustained by the CIT(A).
Further, aggrieved the assessee filed an appeal before the ITAT.
The assessee submitted that the appellant was not treated in default under Section 271A of Income Tax Act for non-maintenance of books of accounts, than how the provision of Section 271B of the Act would be attracted in the absence of books of accounts.
Gurpreet Shah Singh appeared as Departmental Representative.
The Bench comprising of Kul Bharat Judicial Member and M. Balaganesh, Accountant Member observed that the penalty was initiated under Section 271A of Income Tax Act for non-maintenance of books of accounts as well as under Section 271A of Income Tax Act for not complying with the provisions of Section 44AB of the Income Tax Act regarding the auditing of the account.
The penalty for non-maintenance on books of accounts was dropped but the penalty for not getting the accounts audited is sustained.
The Tribunal further observed that if the assessee was not guilty of non maintaining of books of accounts, the presumption would be that he shall not required to maintain the books of accounts.
Thus, the Bench held that imposing penalty for non auditing of books of accounts is not justified. Therefore, directed the AO to delete the penalty.
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