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271B Written Submission

Mr. Deepak Ummat is appealing against a penalty levied under section 271B of the Income-tax Act, arguing that his total turnover is below the threshold for tax audit, making the penalty unjustified. He contends that the addition made by the assessing officer is unfounded and that he has complied with all procedural requirements during the assessment. The appeal requests the deletion of the penalty and asserts that the imposition is based on a misinterpretation of the facts and law.

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8 views2 pages

271B Written Submission

Mr. Deepak Ummat is appealing against a penalty levied under section 271B of the Income-tax Act, arguing that his total turnover is below the threshold for tax audit, making the penalty unjustified. He contends that the addition made by the assessing officer is unfounded and that he has complied with all procedural requirements during the assessment. The appeal requests the deletion of the penalty and asserts that the imposition is based on a misinterpretation of the facts and law.

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akmalhotraco
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BEFORE THE NATIONAL FACELESS APPEALS CENTRE (NFAC)

NEW DELHI

In the matter of: Mr. Deepak Ummat (PAN: AAMPU4516H), R/o 101, Tribhuvan Complex,
Mathura Road, Ishwar Nagar, New Delhi - 110065

Appeal No: NFAC/2015-16/10402751 Assessment Year: 2016-17

And in the matter of: Reply to notice u/s 250 dated 10th March 2025

Respected Sir,
The assessee wants to submit as follows:
1. THAT the levy of penalty under section 271B of the Income-tax Act, 1961, is not applicable to
the assessee as the total sales, turnover, or gross receipts of the business for the year under
appeal does not exceed the monetary limit prescribed under section 44AB of the Income-tax
Act, 1961, which mandates tax audit. The total turnover of shares during the year is Rs.
3,74,020.94 only, which is well below the threshold limit for tax audit. This fact has been
evidently overlooked in the impugned penalty order.
2. THAT the addition made by the Ld. A.O. for Rs. 3,72,718/- is against the facts and
circumstances of the case and is uncalled for and unjustified. Consequently, the basis for the
levy of penalty under section 271B, stemming from this addition, is fundamentally flawed and
lacks legal standing.
3. THAT as per the section 271B, the levy of penalty is upon the amount of TAX sought to be
evaded. Whereas, in the present matter, the outstanding demand has been reduced to NlL, as
per notice u/s 156 of the Act (Copy enclosed). Rather, as per copy of computation sheet a
refund of Rs. 50,520/ is receivable by the assessee, Copy of the same is enclosed herewith.
4. THAT the assessee has complied with all the procedural requirements during the assessment
proceedings, including the filing of returns, attending hearings through counsel, and submission
of all required documents. This compliance demonstrates the assessee's intent to adhere to the
provisions of the Income-tax Act, 1961 and negates any justification for the levy of penalty under
section 271B.
5. THAT the Ld. AO has failed to appreciate the nature of transactions carried out by the
assessee, which were all intraday trades and not subject to the provisions that would
necessitate a tax audit under section 44AB. This misunderstanding has directly contributed to
the incorrect application of penalty under section 271B.
6. THAT the imposition of penalty under section 271B is based on an incorrect interpretation of
the facts and the law applicable to the assessee's case. The assessee's turnover does not meet
the criteria set forth in section 44AB for the relevant assessment year, and as such, the penalty
under section 271B is unjustified and unwarranted.
In light of the above submissions, it is respectfully prayed that the penalty levied under section
271B be deleted and the appeal be allowed in favour of the assessee. The appellant craves
leave to add, alter, amend, or delete any of the grounds of appeal either before or during the
course of the hearing of the appeal.

Yours Truly

Sameer Malhotra,
Counsel for Assessee Dated :24th March 2025

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