INCOME TAX OFFICER Vs. NANAK SINGH GULIANI

JUDGEMENT

(1.) THIS appeal is preferred by the Income-tax Officer aggrieved by the reversal order in respect of imposition of penalty by the Commissioner of Income-tax (Appeals), which order was confirmed on appeal by the Appellate Tribunal.

(2.) THE essential facts indicate that Shri Nanak Singh Guliani, an assessee is engaged in a business of contractor-ship. He was granted a contract amounting to Rs. 88,92,248 from MACT College, Bhopal. Out of this, the assessee had sub-contracted the work of Rs. 39,36,075 to Zenith Engineers, Bhopal, on two per cent, profit and the remaining work was completed by Guliani Construction Company, in which the assessee is a partner. THE Assessing Officer found that the total contract amount received by the assessee was more than Rs. 40 lakhs, as such he should have filed a return along with the audit report under Section 44AB of the Income-tax Act, 1961 (hereinafter referred to as the "Act"). Penalty proceedings were initiated under Section 271B. A notice under Section 271B was issued on December 20, 1991. THE Income-tax Officer passed an order under Section 271B of the Act to the effect that there was failure by the assessee to get his account books audited from a chartered accountant as required under Section 44AB. As the assessee failed to get his books audited and default committed, he was held liable for penalty and the penalty of Rs. 44,461 was imposed by the Income-tax Officer, Bhopal.

(3.) NO doubt, it is mandatory under Section 44AB of the Income-tax Act, 1961, to get the accounts audited, however Section 271B which deals with imposition of penalty, is reproduced hereunder :