Partners is required to get the books of accounts audited if interest & remuneration exceeds the specified limit !!

Partners is required to get the books of accounts audited if interest & remuneration exceeds the specified limit !!

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Decision:    Against the assessee
Penalty under section 271B–Failure to get accounts audited–Leviability–Assessee being partner in a professional firm
Facts:
AO observed from the return of income filed by the assessee that the assessee|s income included income from salary from Price Water House of which he was a partner. Since income by way of salary or remuneration from a firm was to be assessed under the head “Profits and gains from business or profession” in terms of section 28(v) and the receipts from the profession of the assessee was Rs. 74,16,000 i.e., exceeding Rs. 10 lakhs, the assessee was required to get his accounts audited within the specified time and furnish the audit report before the specified date under the provision of section 44AB. Since the assessee failed to do so the AO imposed penalty by invoking the provision of section 271B.
Held:
Since the receipt of the assessee was more than Rs.10 lakhs, in the previous year relevant to the assessment year under consideration, the assessee was required to get his accounts audited as per section 44AB and to enclose a copy of the said report in the prescribed form before the specified date. The assessee had admittedly not got his accounts audited under section 44AB. Therefore, the action of the AO to impose penalty under section 271B was justified.

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