The short issue in this appeal is whether or not penalty under section 44AB will also be attracted in the case in which the professional income of the assessee received from partnership firm of Chartered Accountants is taxable under the head “income from business or profession”. In
the relevant previous year, the assessee, a Chartered Accountant,
received Rs.32,76,000/- from M/s. Lovelock & Lewes of which she was a
partner. In terms of section 28(v), the said income was taxable under the head “Profits & Gains from Business
or Profession”. The Assessing Officer was of the view that the assessee
ought to have obtained the audit report under section 44AB of the Income Tax Act and her failure to do so, invited penalty under section 271B of the Act. The assessee’s contention, on the other hand,
was that since the assessee was not carrying out any independent
profession and the taxability of the said income received under the head “profits and gains from business
or profession” was only due to technical requirement of section 28(v)
of the Act the provisions of section 44AB are not attracted. The
Assessing Officer rejected this plea of the assessee on the basis of a
decision of this Tribunal in the case of Amal Ganguly (ITA No. 2135/Kol./2008,
Assessment Year 2003-04) vide order dated 20.02.2009. The Assessing
Officer was of the view that since the plea raised by the assessee is
not acceptable to the jurisdictional Tribunal, the same cannot be
accepted by him. Respectfully following the view of the Tribunal and
thus holding that the assessee ought to have got her accounts audited
under section 44AB of the Act, the Assessing Officer imposed penalty of
Rs.16,380/- under section 271B of the Act. Aggrieved, the assessee
carried the matter in appeal before ld. CIT(Appeals) but without any
success. Ld. CIT(Appeals) also took note of the decision of the
Coordinate Bench of this Tribunal, which covered the issue against the assessee. The assessee is not satisfied and is in further appeal before us.
INCOME TAX APPELLATE TRIBUNAL, KOLKATA
Before Shri Pramod Kumar (Accountant Member),
and Shri George Mathan (Judicial Member)
I.T.A. No.: 703/ Kol. / 2012 – Assessment year : 2006-07
Usha A. Narayanan Vs. Deputy Commissioner of Income Tax
Date of pronouncing the order : March 25, 2013
ORDER
Per Pramod Kumar:
1. By way of this appeal, the
assessee-appellant has challenged correctness of learned Commissioner of
Income Tax (Appeals)’s order dated 16th March, 2012, in the matter of
penalty under section 271B of the Income Tax Act, 1961, for the
assessment year 2006-07, on the following grounds:-
(1) The ld. CIT(A)
erred in confirming the penalty u/s. 271B imposed on appellant without
considering the fact and circumstance of the case.
(2) The ld. CIT(A)
erred in not distinguishing the income from profession by an individual
professional and the income from profession by a partner of a
professional firm (which consists partners salary, commission, share of
profit as per Partnership Deed) in the light of provision of income Tax Act, 1961 vis-à-vis Indian Partnership Act, 1932.
2. When this appeal was called out for
hearing, none appeared for the assessee nor there was any adjournment
petition. Even on earlier occasions, the assessee was unrepresented. In
this view of the matter and as pointed out by ld. Departmental
Representative that the issue is a covered matter, we are proceeding the
case ex-parte qua the assessee and disposing the matter on the basis of
arguments of ld. D.R., material on record and binding judicial
precedence on the issue.
3. The short issue in this appeal is
whether or not penalty under section 44AB will also be attracted in the
case in which the professional income of the assessee received from
partnership firm of Chartered Accountants is taxable under the head
“income from business
or profession”. In the relevant previous year, the assessee, a
Chartered Accountant, received Rs.32,76,000/- from M/s. Lovelock &
Lewes of which she was a partner. In terms of section 28(v), the said
income was taxable under the head “Profits & Gains from Business or
Profession”. The Assessing Officer was of the view that the assessee
ought to have obtained the audit report under section 44AB of the Income
Tax Act and her failure to do so, invited penalty under section 271B of
the Act. The assessee’s contention, on the other hand,
was that since the assessee was not carrying out any independent
profession and the taxability of the said income received under the head
“profits and gains from business
or profession” was only due to technical requirement of section 28(v)
of the Act the provisions of section 44AB are not attracted. The
Assessing Officer rejected this plea of the assessee on the basis of a
decision of this Tribunal in the case of Amal Ganguly (ITA No. 2135/Kol./2008,
Assessment Year 2003-04) vide order dated 20.02.2009. The Assessing
Officer was of the view that since the plea raised by the assessee is
not acceptable to the jurisdictional Tribunal, the same cannot be
accepted by him. Respectfully following the view of the Tribunal and
thus holding that the assessee ought to have got her accounts audited
under section 44AB of the Act, the Assessing Officer imposed penalty of
Rs.16,380/- under section 271B of the Act. Aggrieved, the assessee
carried the matter in appeal before ld. CIT(Appeals) but without any
success. Ld. CIT(Appeals) also took note of the decision of the
Coordinate Bench of this Tribunal, which covered the issue against the
assessee. The assessee is not satisfied and is in further appeal before
us.
4. We see no reason to take any contrary
view other than the view so taken by the Coordinate Bench of this
Tribunal in the case of Amal Ganguly (supra). Respectfully following the
said decision, we uphold the action of authorities below and decline to
interfere in the matter.
5. In the result, the appeal is dismissed. Order pronounced in the open Court on 25th day of March, 2013.
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