14 May 2021
An assessee received Notice U/S 139(9) Erorr Code- 1022 as folowing : "The return of income filed by you as per the above details is considered as defective with-in the meaning of section 139(9) of the IT Act for the following reason: Reason Probable Resolution Taxpayer is offering Income under the head Profits and gains from Business or Profession. Hence, as per the provisions of Sec.44AA, the taxpayer is required to maintain books of accounts. As seen from the return of income filed, the taxpayer has offered regular business income in addition to Presumptive Income. However, Part A of the Profit and Loss Account and Balance Sheet are not filled, in respect of the regular business income. The correction of this defect has to be made by filing a corrected return. In the corrected return of income, the Balance Sheet and Profit and Loss account have to be filled, to show the basis on which regular income from business has been computed. Please note that the books of accounts are required to be audited, if the regular business income disclosed in the return is less than the limits prescribed under the presumptive taxation provisions of the Income Tax Act. Accordingly, books of account are to be maintained and the report of audit has to be furnished. Please note that if the defect is not addressed with-in the time allowed, your return of income will be treated as invalid." My Quarry is the Commission agent is require to maintain Books U/S 44AA or not if his Gross Receipts is above or Below 10 Lakhs ? Please resolve my Problem. Please say how i can reply this Notice., Thanks & Regards
16 May 2021
Analysis of Section 44AA of Income Tax Act, 1961 i.e. Compulsory maintenance of books of accounts 1) Maintenance of accounts by certain persons carrying on profession In case of specified / notified profession, – if gross receipt is more than Rs. 1,50,000 in all 3 years preceding the previous year or – likely to exceed if profession is newly setup, then assessee is required to maintain such book of account as may be prescribed (i.e. prescribed under Rule 6F), otherwise he is required to maintain such books of accounts or documents from which Assessing Officer is able to complete the assessment.. As per Section 271A, if the assessee fails to maintain books of accounts as per Section 44AA then penalty of Rs. 25,000 may attract.