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Facts
The assessee filed appeals against orders levying penalty under Section 271(1)(b) for non-compliance with notices and against the dismissal of appeals by the CIT(A) for not filing returns or depositing demand. The CIT(A) dismissed the appeals based on a mistaken understanding that the assessee had not filed its return or paid due tax.
Held
The Tribunal held that in cases where assessment was completed under Section 147 despite subsequent compliance by the assessee, levying penalty under Section 271(1)(b) is not justified. Furthermore, the appeals were not maintainable under Section 249(4)(b) as the assessee had indeed filed its return and paid self-assessment tax.
Key Issues
Whether penalty under Section 271(1)(b) is leviable when the assessment is completed under Section 147 and the assessee has complied with subsequent notices. Whether appeals are maintainable when the CIT(A) wrongly concludes non-filing of return or non-payment of taxes.
Sections Cited
271(1)(b), 142(1), 147, 148, 156, 249(4)(b)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘E’: NEW DELHI
Before: SHRIS.RIFAUR RAHMAN & SHRI SUDHIR KUMAR
(Assessment Year: 2015-16) (Assessment Year: 2016-17) M/s. Visisth Chay Vypar Limited, vs. ITO, Ward 26(3), C/o Kashyap & Co., Delhi. 114/214, Citi Centre, Begum Bridge Road, Meerut – 250 001 (Uttar Pradesh). (PAN : AAACV6571C) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Pranshu Goel, CA Shri Aditya Gupta, Advocate REVENUE BY : Shri Sanjeev Kaushal, CIT DR Date of Hearing : 14.08.2025 Date of Order : 22.08.2025 O R D E R to 905/DEL/2025 PER S.RIFAUR RAHMAN,ACCOUNTANT MEMBER :
1. 1. These appeals are filed by the assessee against the order of ld. Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi [“ld. CIT(A)”, for short] dated 27.01.2025 for AYs 2015-16 to 2017-18. The assessee also filed appeals against the order of ld. CIT(A) dated 30.09.2024 for AYs 2015-16 & 2016-17 against the levy of penalty under section 271(1)(b) of the Income-tax Act, 1961 (for short ‘the Act’).
2. Since the issues are common and the appeals are connected, therefore, the same are heard together and being disposed off by this common order.
3. First we take up & 905/Del/2025 for AYs 2015-16 & 2016-17 against the levy of penalty u/s 271(1)(b) of the Act.
4. At the time of hearing, ld. AR of the assessee brought to our notice that the Assessing Officer has initiated the proceedings in AYs 2015-16 & 2016-17 under section 271(1)(b) of the Act and imposed the penalty of Rs.20,000/- with the finding that the assessee has not complied to various notices issued u/s 142(1) of the Act. The Assessing Officer has imposed the penalty with the observation that earlier Assessing Officer has issued the notices u/s 142(1) and served the same via email which is available with the erstwhile Assessing Officer. However, the assessee has complied to the recent notice received by it and even the Assessing Officer has completed the proceedings u/s 147 of the Act, therefore, in fact the assessee has complied with the notices received by it and prayed that the penalty may be deleted. to 905/DEL/2025 5. On the other hand, ld. DR of the Revenue submitted that considering the non-compliance of the assessee for the various notices, the Assessing Officer is justified in levying the penalty.
Considered the rival submissions and material placed on record. We observe that there was non-compliance on the part of the assessee. However, we notice that the assessment was completed based on the compliance from the assessee even though, the subsequent notices issued by the present Assessing Officer were complied with. Since the assessment was completed u/s 147 of the Act, it is not justified to levy the penalty in this case. Accordingly, penalty levied u/s 271(1)(b) of the Act is deleted and appeals being & 905/Del/2025 are allowed.
With regard to 902 & 903/Del/2025 are concerned, the facts are similar in all the three assessment years. Hence we are considering AY 2016-17 being ITA No.902/Del/2025 as lead case to adjudicate the same.
At the time of hearing, ld. AR of the assessee brought to our notice that ld. CIT (A) has dismissed the appeal of the assessee with the observation that assessee has not filed its return of income in response to a notice issued u/s 148 of the Act and as per the assessment order passed u/s 147 of the Act, a demand was created of Rs.35,54,184/- and as per the notice issued u/s 156 of the Act with the direction to deposit the abovesaid demand. He observed that since the assessee has not deposited the demand before filing this appeal, the appeal is not maintainable u/s 249(4)(b) of the Act. He brought to 905/DEL/2025 to our notice Form 35 filed by the assessee, wherein in Column No.8, assessee has clearly indicated that assessee had filed its return of income and paid the self-assessment tax of Rs.10,05,536/-. Therefore, the case of the assessee will not fall under section 249(4)(b) of the Act and he prayed that the case of the assessee may be remitted back to the ld. CIT (A) to admit the appeal of the assessee and adjudicate the same.
On the other hand, ld. DR of the Revenue did not controvert the facts on record.
Considered the rival submissions and material placed on record. We observe that ld. CIT (A) has dismissed the appeal of the assessee with the mistaken understanding that assessee has not filed its return of income and also not deposited the due tax before filing the appeal. Whereas the assessee has filed the appeal with Form 35 wherein assessee has declared that assessee has already filed its return of income and also paid the due self- assessment tax. Therefore, the case of the assessee does not fall under section 249(4)(b) of the Act. Accordingly, we direct the ld. CIT (A) to admit the appeal of the assessee and adjudicate the same on merits after giving proper opportunity of being heard to the assessee.
In the result, the appeal being for AY 2016-17 is allowed for statistical purposes.
With regard to & 903/Del/2025, since the facts are exactly similar to ITA No.902/Del/2025 our above findings in ITA to 905/DEL/2025 No.902/Del/2025 are applicable mutatis mutandis in ITA Nos.901 & 903/Del/2025. Accordingly, the appeals filed by the assessee being ITA Nos.901 & 903/Del/2025 are allowed for statistical purposes.
To sum up : assessee’s appeals being ITA Nos.901, 902 & 903/Del/2025 are allowed for statistical purposes and ITA Nos.903 & 904/Del/2025 filed by the assessee are allowed. Order pronounced in the open court on this 22nd day of August, 2025.