High Court Of Allahabad
CIT & ANR. vs. S.K. Gupta & Co.
Section 44AB, 271A, 271B
Asst. Year 1990-91
R.K. Agrawal & Shashi Kant Gupta, JJ.
IT Appeal No. 89 of 2000
10th September, 2009
Counsel Appeared :
A.N. Mahajan, A. Kumar, B.J. Agarwal, D. Awasthi, G. Krishna, R.K. Upadhayay & S. Chopra, for the Appellants : R.R. Kapoor, for the Respondent
JUDGMENT
By the court :
The present appeal has been filed under s. 260A of the IT Act, 1961 (hereinafter referred to as “the Act”) against the order dt. 2nd Sept., 1999, passed by the Tribunal, New Delhi. The appeal has been admitted on the following substantial question of law vide order dt. 13th Nov., 2006 :
“Whether, on facts and in the circumstances of the case, the learned Tribunal was legally correct in holding that there was a reasonable cause for not getting the accounts audited as no accounts were maintained, and thus the assessee could not be penalised both under ss. 271A and 271B of the IT Act, whereas the assessee being a contractor having total receipts from contract work at Rs. 1,24,69,486 has failed to maintain books of account and has not got his accounts audited under s. 44AB of the IT Act. Thereafter, the assessee has violated the provisions contained in both the sections and he is liable for penal action both under ss. 271A and 271B of the IT Act, 1961 ?”
Briefly stated, the facts giving rise to the present appeal are as follows. The appeal relates to the asst. yr. 1990-91. The respondent-assessee was a firm which had been granted registration under s. 185(1)(a) of the Act for the asst. yr. 1985-86. It is engaged in the construction work. It had not maintained any books of account. The receipts from contract business were to the tune of Rs. 1,24,69,486. As the assessee had not maintained any books of account, it did not get its books of account audited nor submitted any audit report while filing the return of income. Penalty proceeding under s. 271B of the Act was initiated by the assessing authority who vide order dt. 23rd May, 1991, imposed a sum of Rs. 62,350 as penalty for not getting the accounts audited. The assessee feeling aggrieved preferred appeal before the CIT(A) who vide order dt. 28th July, 1993, cancelled the penalty which order has been upheld by the Tribunal.
We have heard Sri A.N. Mahajan, learned standing counsel for the Revenue and Sri R.R. Kapoor, learned counsel appearing for the respondent assessee. Sri Mahajan contended that the Tribunal has erred in law while upholding order of the CIT(A) cancelling the penalty in as much as the assessee had failed to get its books of account audited.
The submission of Sri Mahajan is misconceived for the 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 assessee has not maintained the books of account the appropriate provision under which penalty proceedings can be initiated is under s. 271A of the Act which recourse 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 CIT(A) cancelling the penalty imposed under s. 271B of the Act.
The appeal fails and is, therefore, dismissed.
[Citation : 322 ITR 86]
