Sec.44aa

From the AY 2011-12 on wards the tax audit limit u/s is Rs.60 lacs. If it is <60 lacs you may file the return under presumptive basis, that is you must admit net profit @ 8% of the TO, if it is <8% then you have to maintain the accounts and get the same audited u/s 44 AB

But what if no income tax return is filed?? can A.O. impose penalty on that ground??

If an assessee whose taxable income exceeds the MTL then he has to file his returns. In your case if you maintain the accounts and the profit is less than the limit then no return is to be filed. In your case the TO is 20,00,000/- and 8% of the TO is 1,60,000/- less than the prescribed limit and hence you may or may not file the returns and AO is not supposed to initiate the penalty proceedings

Manoj JI

He can avaoid the penalty if his income in 3 preceeding years is less than the limits specified u/s 44AA and tis is the only first year in which his income has exceeded the limit defined u/s 44AA.

In this case he can avoid penlaty for non maintainenance of books of accounts