RATAKONDA RAVI,MADANAPALLI vs. ITO, WARD-1, MADANAPALLI

Penalty under section 271(1)(b) of the Income Tax Act, 1961 (for short “the Act”) was levied for non-compliance of notice under section 142(1) of the Act on four occasions, namely, 22/12/2020, 10/02/2021, 05/07/2021 and 15/07/2021. Learned AR submits that the learned Assessing Officer passed assessment order under section 143(3) of the Act on 21/09/2021 and that itself shows that the assessee co-operated with the assessment proceedings and the assessee was prevented on such occasions due to medical reasons. Learned AR, therefore, prayed that inasmuch as the assessee co-operated with the assessment proceedings, assessment order was passed after hearing the assessee only, the levy of penalty is not invited and the same may be deleted.

Per contra, learned DR submitted that if this sort of lapse on the part of the assessee is allowed, it would create a lot of problem to the authorities because the assessees may appear before the learned Assessing Officer in the last minute and say that ultimately they complied with the notices. He vehemently opposed the contentions of assessee.

We have gone through the record in the light of the submissions made on either side. It could be seen from the order under section 271(1)(b) of the Act that the assessee failed to comply with the notice under section 142(1) of the Act on four occasions, stated supra, which resulted in levy of penalty at Rs. 10,000/- for each occasion. Having regard to the fact that ultimately the assessment proceedings could be completed with the co-operation of the assessee, but at the same time, to strike a balance between the conduct of the assessee and need to take a lenient view, we sustain the penalty for one occasion at Rs. 10,000/- and delete the balance.

In the result, appeal of assessee is treated as partly allowed.