STUTI TADING LLP,MUMBAI vs. ITO 20(3)(4), MUMBAI

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ITA 1086/MUM/2021Status: DisposedITAT Mumbai25 March 2022AY 2016-175 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 delay of 17 days in complying with the notice, explained by the bonafide reason of shifting office premises, was a reasonable cause. Therefore, the penalty levied under Section 271(1)(b) could not be sustained.

What were the facts?

The assessee, a trading LLP, failed to comply with a notice issued under Section 142(1) of the Income Tax Act on the scheduled date due to shifting of its office premises. The Assessing Officer initiated penalty proceedings under Section 271(1)(b) for this non-compliance.

What were the issues?

Whether a penalty under Section 271(1)(b) is leviable for non-compliance with a notice under Section 142(1) when a reasonable cause for the delay is provided.

Which sections of the Income-tax Act were involved?

Section 271(1)(b),Section 142(1),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “G” BENCH, MUMBAI

Hearing: 15.03.2022Pronounced: 21.03.2022

IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER (A.Y: 2016-17) Stuti Trading LLP Vs. ITO 20(3)(4) B-401, Naman Midtown, Piramal Chamber Tulsi Pipe Road, Mumbai – 400012. Elphiston Road, Mumbai – 400028. �थायी लेखा सं./जीआइआर सं./PAN/GIR No. : ACXFS7406F Appellant .. Respondent Appellant by : None Respondent by : Mr.Hoshang .B.Irani Date of Hearing 15.03.2022 Date of Pronouncement 21.03.2022 आदेश / O R D E R PER PAVAN KUMAR GADALE JM:

The assessee has filed the appeal against the order of the Commissioner of Income Tax (Appeals) passed u/s 271(1)(b) and 250 of the Income Tax Act. The assessee has raised the following grounds of appeal.

1. On the facts and circumstances of the case and in law the Authorities below, has erred in levying penalty of Rs. 10,000/- u/s 271(1)(b) of the Act and the reason assigned for doing so where wholly wrong, irrelevant and not in accordance with provision of IT Act and rules made thereunder:

Stuti Trading LLP. Mumbai. - 2 -

2.

The appellant craves leave to add, alter, modify and delete all or any of the aforesaid grounds of appeal on or before the date of hearing.

2. The brief facts of the case are that, the assessee is a LLP engaged in the business of trading and manufacturing of gems and jewellary and precious stones. The assessee’s case was selected for scrutiny under CASS and notice u/s 143(2) of the Act was served on the assessee, Further the notice u/s 142(1) of the Act was issued on 23.08.2018 informing the date of hearing on 30.08.2018. Since there was no compliance to the notice on the scheduled date of hearing, the A.O has initiated penalty proceedings u/s 271(1)(b) of the Act. Whereas the assessee has filed the explanations vide letter dated 17.09.2018 mentioning that due to shifting of premises, the assessee could not comply with the details within the time and has furnished the details through e-mail. The A.O. was not satisfied with the explanations and observed that the assessee should have complied with the statutory notice within the time allowed and levied a penalty u/s 271(1)(b) of the Act of Rs. 10,000/- and passed the order on 02.01.2019.

3.

Aggrieved by the penalty order, the assessee has filed an appeal before the CIT(A). Whereas the CIT(A) in the appellate proceedings considered the grounds of appeal and issued the notice on 18..01.2021 and 25.02.2021 for online submissions. However no submissions are filed by the assessee for non compliance of notice u/s 142(1) of the Act. The CIT(A) considered the facts that the assessee has Stuti Trading LLP. Mumbai. - 3 - responded to the notice after expiry of 17 days and has confirmed the action of the A.O in levying the penalty u/s 271(1)(b) of the Act and dismissed the assessee appeal. Aggrieved by the CIT(A)order, the assessee has filed an appeal before the Hon’ble Tribunal.

4. We heard the Ld. DR submissions and perused the material on record as none appeared on behalf of the assessee. The sole crux of the disputed is with regard to levy of penalty u/s 271(1)(b) of the Act for non compliance of notice u/s 142(1) of the Act within the time allowed. On perusal of the facts and information on record, we find that the assessee was served notice u/s 142(1) of the Act on 23.08.2018 and fixing the date of hearing on 30.08.2018.Whereas the assessee has not complied with the notice on the date of hearing therefore the A.O has initiated penalty proceedings u/s 271(1)(b) of the Act. We find that the assessee vide letter dated 17.09.2018 has filed the explanations on delay that due to shifting of office premises the assessee could not file the information on time. The A.O accepted the fact that assessee’s reply was received on 17.09.2018 after expiry of 17 days but levied penalty. Whereas in the appellate proceedings, the assessee has submitted in the statement of facts that the assessee has attended hearings thereafter from time to time and the assessing officer has completed the assessment.

5.

We considering the facts, circumstances and the explanations that the assessee has complied with the statuary

Stuti Trading LLP. Mumbai. - 4 - notice u/s 142(1) of the Act not before the prescribed time by the A.O but complied with the notice after delay of 17 days which cannot be disputed and the scrutiny assessment was completed. Further, the reasonable cause explained that the delay was due to shifting of office premises which is bonafide and cannot be disputed. Accordingly, we find the penalty cannot be sustained and set aside the order of the CIT(A) and direct the Assessing officer to delete the penalty and allow the grounds of appeal in favour of the assessee.

6.In the result, the appeal filed by the assessee is allowed.

Order pronounced in the open court on 21.03.2022.

Sd/- Sd/- (PRASHANT MAHARISHI) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated 21.03.2022 KRK, PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / The CIT(A) 4. आयकर आयु�त(अपील) / Concerned CIT �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Mumbai 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, स�या�पत ��त //True Copy// 1.

Stuti Trading LLP. Mumbai. - 5 -

( Asst. Registrar) ITAT, Mumbai

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