DHRUV FURNITURES PRIVATE LIMITED,. vs. ITO WARD-1(1), FARIDABAD, .

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ITA 8440/DEL/2025Status: DisposedITAT Delhi08 April 2026AY 2016-174 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the notice dated 04.10.2018 was ambiguous as the assessee had already complied with the initial notice dated 02.07.2018, which was reflected in the assessment order. Therefore, there was no non-compliance warranting penalty proceedings.

What were the facts?

The assessee is appealing a penalty levied under section 271(1)(b) for non-compliance with a notice dated 04.10.2018. The notice required compliance with earlier requests from 02.07.2018. The assessee argued that the notice was ambiguous and they had already complied with the earlier notice.

What were the issues?

Whether penalty under section 271(1)(b) is leviable for non-compliance with an ambiguous notice, especially when the assessee had already complied with the underlying query.

Which sections of the Income-tax Act were involved?

Section 271(1)(b),Section 142(1),Section 143(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “G” BENCH, DELHI

Before: SHRI ANUBHAV SHARMA&

Hearing: 30.03.2026Pronounced: 08.04.2026

Date of Hearing 30.03.2026 Date of Pronouncement 08.04.2026 O R D E R PER ANUBHAV SHARMA, JM:

This appeal is preferred by the assessee against the order dated 04.12.2025 of the Ld. National Faceless Appeal Centre (NFAC) Delhi (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in DIN & Order No.: ITBA/NFAC/S/250/2025-26/1083325683(1) arising out P a g e | DhruvFurnitures Pvt. Ltd. (AY: 2016-17) of the order dated 30.05.2019 u/s 271(1)(b) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by the ITO, Ward-1(2) for AY: 2016-17. The levy of penalty of Rs. 10,000/- is sustained by the ld. CIT(A).

2.

On hearing both sides we find that at page 1-2assessee has provided copy of notice u/s 142(1) of the Act dated 04.10.2018 which has given rise to levy of penalty and wherein it is mentioned that assessee was called upon to “please furnish the balance information as already called for vide this office notice dated 02.07.2018”.

3.

As we appreciate the assessment order we find that assessing officer mentions that after notice u/s 143(2) issued on 08.08.2017 thereafter notice u/s 142(1) was issued on 02.07.2018 along with a questionnaire for 13.07.2018. Assessing officer mentions in the assessment order that in responseassessee filed reply through e-filing portal on 28.08.2018. Thereafter aimpugned notice was issued on 04.10.2018 for making compliance before 10.10.2018 but allegedly no compliance was made by the assessee. Again notice u/s 142(1) was issued on 08.11.2018 for compliance up to 14.11.2018 and on 19.11.2018 assessee company had submitted reply along with all relevant evidences.

P a g e | DhruvFurnitures Pvt. Ltd. (AY: 2016-17) 4. Nowhere in the assessment order assessing officer has made any observation that there was any non-compliance of a notice dated 04.10.2018 for which penalty proceedings u/s 271(1)(b) of the Act is being initiated. Assessee made compliances of the first notice dated 02.07.2018 submitting copy of ITR, profit and loss account, balance sheet and other annexures. Therefore, when impugned notice dated 04.10.2018 was issued and assessee was called upon to comply as per earlier notice dated 2.07.2018, the notice and query became ambiguous. The Assessee had already complied the notice dated 02.07.2018 and the fact is reflected in the assessment order. Thus, we find that there was no non-compliance requiring issuance of notice u/s 271(1)(b) of the Act and consequential penalty proceedings and the impugned order dated 30.05.2019 are not sustainable under law.

5.

Accordingly, ground raised are sustained and appeal is allowed. The impugned penalty levied by the Learned Assessing Officer stands quashed.

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