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Case law u/s 271 B and sec 273 B

This query is : Resolved 

Pls provide me some case laws wherein the assesee didn't got his accounts audited due to bonafide interpretation of the term turnover.
The assesee had a commission income of more than 40 lacs,but he was of the view that since this is commission income,it would fall under 'Income from Other Source' and hence he filed his return as such without getting them audited.Now a show cause notice has been served to him for imposition of penalty u/s 271 B.This can be waived if there is some reasonable cause shown u/s 273 B.Is there any case law available?

Azadi Bachoo Andolan Vs. Union Of India (2001) 252 ITR 471(Delhi). According to this decision reasonable cause can be said to be a cause which prevents a man of ordinary prudence and average intelligence acting under normal circumstances, without negligence or inaction or want of bonafides.

Sir,thi case would define a reasonable cause but my query specifically is whether commission income construed as other source by the assesee bonafide would be a reasonable cause to defend the penalty.Is there any case law specifically available on this.

Mr.Kapil, if you look at the very beginning of the section 44AB that provides for tax audit, it begins with the words "every person carrying on business shall.." which means that only persons who carry on business, which is assessable under the head "Profits and gains from Business or profession"is under an obligation to obtain and furnish an audit report in the manner laid down under section 44AB.Since commission is the only source, as deduced from the information furnished by you, it is certain that it falls to be considered under the residuary head "Other sources", which is not covered by tax audit. There is no question of imposing penalty under section 271B. The assessing Officer is not correct in his approach and even if levies penalty,the same would be cancelled on appeal. However, you can tell the AO that prima facie the issue is not within the clutches of the penal clause intended for tax audit.This will not fall under reasonable cause for a reprieve, as basically there is no question of default

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