IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, C: NEW DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER ITA No.5654/Del/2024 [Assessment Year: 2013-14]

Krishna Enterprises, Assistant Commissioner of

202, Bhagirathi Apartment, Income Tax, Sector-9, Rohini, Delhi- Vs Circle 34(1), 110085. Delhi.

PAN- AAHFK4892P Assessee Revenue Assessee by Shri Suresh Kumar Gupta, CA Revenue by Shri B.S. Anand, Sr. DR Date of Hearing 25.06.2025 Date of Pronouncement 19.09.2025

ORDER

PER BRAJESH KUMAR SINGH, AM, This appeal has been preferred by the assessee against the order dated 20.11.2024 of National Faceless Appeal Centre (NFAC) [hereinafter referred to as the Ld. CIT(A)] pertaining to Assessment Year 2013-14 arising out of penalty order u/s 271B of the Income-tax Act, 1961(hereinafter referred to as ‘the Act’) passed by the Ld. Assessing Officer (Ld. AO’, for short) dated

23.09.2022.

2. The grounds of appeal raised by the assessee reads as under: -

“1. On facts and circumstances of the case, the AO/AU has erred in imposing penalty of Rs. 1,50,000/- u/s 271B of IT Act without jurisdiction. Therefore, the penalty imposed need to be deleted.

2. On facts and circumstances of the case, the AO/AU has erred in imposing penalty of Rs.1,50,000/- for not comply with provisions of sec 44AB of IT Act ignoring the fact that the above provisions are not applicable to the appellant. Hence, no penalty could be levied upon appellant.”

3. The assessee was a non-filer and, as per the data available with the AO, the assessee had deposited cash to the tune of Rs. 3,78,06,400/- in his saving bank account maintained with the HDFC Bank Ltd., Rohini, New Delhi. The AO after recording his reasons, issued notice u/s 148 of the act, dated 31.03.2021. In response, the assessee filed his return of income on 14.09.2021 declaring total income of Rs. 61,950/-. During the assessment proceedings, the assessee submitted that the concern was engaged in the business of trading of metals and submitted that the said cash deposit was in his current account and not in the saving bank account. The AO completed the assessment by estimating the net profit @ 8% of the total turnover of Rs. 4,63,30,254/-. This turnover was declared by the assessee in his return of income filed on 14.09.2021, in response to the aforesaid notice u/s 148 of the Act. The assessee submitted that the turnover of Rs. 4,63,30,254/-, included the said cash deposit of Rs. 3,78,06,400/-.

3.1 Further, the AO initiated penalty proceedings u/s 271B of the Act for non-maintenance of accounts and getting it audited, by observing as under:

“ In the return the assessee declared net profit of Rs.61,950/- which is only 0.133% on sales turnover of Rs. 4,63,30,254/-, Therefore, as per provisions of section 44AD of the Act, in a case where books of accounts have not been maintained by the assessee and the turnover is less than Rupees one crore, the net profit can be shown at a minimum of 8% and the assessee is not required to maintain regular books of accounts. However, in a situation where the net profit is to be shown at less than 8% of turnover / sales, in that case the assessee is required to maintain books of accounts Under section 44AA(2) of the Act, and also get the same audited by a Chartered Accountant as per provision of Section 44AB of the Act.

7.2 Further, despite such huge turnover of Rs. 4,63,30,254/- and huge cash deposits in his bank accounts, the assessee did not care to get his accounts audited under Section 44AB of the Act. It is also noteworthy that the assessee did file his return of income only after a notice under Section 148 of the Act, which was issued to him. Thus, it is clear that the appellant is having a non-compliant and deliberate attitude towards the revenue. Therefore, the net profit of the assessee is taken as 8% of his total sales/turnover of Rs.4,63,30,254/-, which comes to Rs. 37,06,420/-. Since, the assessee has already shown net profit of Rs. 61,9