Income Tax Appellate Tribunal - Allahabad
Miri Lal Mulk Raj vs Income-Tax Officer on 15 December, 1994
Equivalent citations: [1995]52ITD365(ALL)
ORDER
R.D. Agrawala, Judicial Member
1. This is an appeal by the assessee which challenges the levy of penalty on it under Section 271A of the Income-tax Act, 1961 in a sum of Rs. 5,000 by the Assessing Officer, reduced to Rs. 3,000 during first appeal.
2. The learned authorised representative for the assessee contended before me that, firstly, the Assessing Officer failed to express his intention of initiating penalty in question in the assessment order and, secondly, the turnover of the assessee also did not exceed Rs. 2,50,000 as contemplated by Clause (fi) of Sub-section (2) of Section 44AA of the Act and as such penalty was not tenable.
3. The learned Departmental Representative, opposing, submitted that unlike certain other provisions such as Section 271 of the Act, penalty was not necessarily required to be initiated by the Assessing Officer "in the course of any proceedings under this Act". This meant, it was contended, that penalty under Section 271Aas also under Section 27IB could be initiated even off the assessment made by the Assessing Officer on an assessee.
4. Patently this submission carries force. The legislative intent is manifest by the plain wordings used in Section 271 A or, for that matter, also Section 27IB on the one hand and, on the other, provisions such as Section 271 of the Act. While in the latter case penalty is initiable only in the course of any proceeding under the Income-tax Act, such an embargo does not apply to the former group of cases. The objection taken by the assessee is, as such, overruled.
5. Coming to the other plea taken by the learned authorised representative for the assessee on the turnover aspect, it may be stated that Clause (ii) of Sub-section (2) of Section 44AA of the Act read as under at the relevant time :
(ii) where the business or profession is newly set up in any previous year, if his income from business or profession is likely to exceed twenty five thousand rupees or his total sales, turnover or gross receipts, as the case may be, in business or profession are or is likely to exceed two hundred and fifty thousand rupees, during such previous year,
6. The provision of law clearly conveys that it would be applicable in any of the two situations, firstly, where the income of the assessee was likely to exceed Rs. 25,000 and, secondly, where his total sales, turnover or gross receipts were to exceed Rs. 2,50,000. Incidentally both the situations in this case existed. The assessee showed its income at Rs. 45,000 as is evident from the computation sheet submitted by-it. Further, as per reply of the assessee to the notice issued to them under Section 139(9) of the Act, this income was estimated by applying 15 per cent profit on the sale price, the Department is, therefore, correct in submitting that on working the gross receipts of the assessee would thus come to Rs. 3 lacs.
7. It may thus be seen that although the two conditions about the income and the turnover appearing in Section 44AA(2)(ii) of the Act are exclusive of each other and not conjunctive, in the case in hand both of them existed.
8. The plea of the assessee thus fails on this account also.
9. However, the penalty is reduced to the minimum level of Rs. 2,000 from Rs. 3,000.
10. The appeal is partly allowed.