Jasbir Singh vs ITO

PER NAVEEN CHANDRA, ACCOUNTANT MEMBER:-

These two appeals by the assessee are preferred against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi dated 12.07.2024 under section 250 of the Income Tax Act (hereinafter referred to as "the Act") arising out of the penalty order dated 28.06.2019 passed by the Assessing Officer, ITO, Ward – 57(4), Delhi (hereinafter referred as “the AO”) under section 271A and 271B of the Act pertaining to Assessment Year 2011-12, respectively.

Since the above captioned appeals were heard together and the facts in issues are identical, both the appeals are being disposed of by this common order for the sake of convenience and brevity.

Briefly stated the facts of the case as culled out that the assessee is the proprietor of the firm under the name & style as Sukhmani Enterprises dealing business of trading of sale/purchase of Keypad mobile phones. Assessee filed its return of Income declaring income of Rs.1,59,845/- on 16.10.2018 for A.Y 2011-12 which was assessed under section 148 of the Act on 31.12.2018.

During the reassessment proceedings the assessee did not comply with various notices. The assessee was thus issued notice under section 271A read with section 274 of the Act dated 30.01.2019 for failure to maintain books of account. Again, due to non-compliance on part of assessee, AO passed order u/s 271A of the Act on 28.06.2019, wherein penalty of Rs. 25,000/- was imposed. Aggrieved by the order of AO assessee was before the CIT(A). The CIT(A) has dismissed the appeal and upheld the penalty order imposing penalty of Rs.25,000/- u/s 271A of the Act.

Similarly, the AO levied a penalty u/s 271B for non-audit of accounts in absence of any explanation from the assessee. Thus the main issues are with regard to the penalty u/s 271A of the Act in ITA No.5187/Del/2024 and penalty u/s 271B in ITA No.5188/Del/2024.

We find that the penalty order u/s 271A has not considered the submission of the assessee that he has maintained all the records up to date for the relevant year. In such factual matrix, we therefore, consider the penalty order is unsustainable in law and the same is deleted. Appeal is allowed.

Penalty order u/s 271B of the Act levying penalty of Rs.1,50,000/- is also deleted as the lower authorities has not considered the factual position that the assessee had submitted the detailed annual audit report of the relevant year to the Assessing Officer. The penalty is accordingly deleted and the appeal is allowed.

In the result, both the appeals in ITA Nos. 5187 & 5188/DEL/2024 are allowed.