SMT. DIVYA AGARWAL,KANPUR vs. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, KANPUR

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ITA 268/LKW/2018Status: DisposedITAT Lucknow31 January 2019AY 2014-153 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 while the assessee initially failed to comply with notices, the assessment was eventually completed. Following a precedent, the Tribunal found no reason to uphold the penalty.

What were the facts?

The assessee failed to comply with notices issued under Section 142(1) during assessment proceedings, leading to a penalty under Section 271(1)(b). The assessee argued that the assessment proceedings were abated due to a search under Section 132 and subsequent completion under Section 153A.

What were the issues?

Whether penalty under Section 271(1)(b) is sustainable when assessment proceedings were abated and later completed, despite initial non-compliance with notices.

Which sections of the Income-tax Act were involved?

Section 271(1)(b),Section 142(1),Section 132,Section 153A,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, LUCKNOW BENCH ‘B’, LUCKNOW

Before: SHRI A. D. JAIN & SHRI T. S. KAPOOR

For Appellant: Shri P. K. Kapoor, C. A
For Respondent: Shri C. K. Singh, D.R
Hearing: 30/01/2019Pronounced: 31/01/2019

PER T. S. KAPOOR, A.M.

This is an appeal filed by the assessee against the order of learned CIT(A)-IV, Kanpur dated 31/01/2018 pertaining to assessment year 2014- 15. In this appeal the assessee has taken four grounds however, the crux of the grounds of appeal is the action of learned CIT(A) by which he has sustained the penalty of Rs.10,000/- which the Assessing Officer had made u/s 271(1)(b) of the Act.

2.

In this case proceedings u/s 147 were initiated issuing notice u/s 148 of the Act. Later on, notices u/s 142(1) was issued fixing compliance on 02/06/2016. On the date fixed, neither anybody attended nor filed any written submissions, therefore, the Assessing Officer issued notice penalty notice u/s 271(1)(b) of the Act. When no compliance was made, the

I.T.A. No.268/Lkw/2018 Assessment Year:2014-15 2

Assessing Officer imposed penalty of Rs.10,000/- u/s 271(1)(b) of the Act. Aggrieved with the action of Assessing Officer the assessee went in appeal before learned CIT(A) who also sustained the penalty.

3.

Learned A. R. submitted before us that learned CIT(A) while confirming the penalty has failed to appreciate that the search u/s 132 having been conducted on 27/11/2015, the proceedings for the year under consideration stood abated in view of the provisions of section 153A of the Act and as such there was no non compliance at all at the part of the assessee. Learned A. R. further submitted that since the assessment u/s 153A was completed u/s 153A read with section 143(3) of the Act therefore, no penal provisions u/s 271(1)(b) should have been invoked by imposing penalty of Rs.10,000/-/.

4.

Learned D. R., on the other hand, heavily relied on the orders of the authorities below and stated that the penalty was imposed for not complying with the notice u/s 142(1).

5.

We have heard the rival parties and have gone through the material placed on record. We find that assessee during the assessment proceedings did not comply with the notice issued u/s 142(1) therefore, the authorities below have imposed penalty u/s 271(1)(b) of the Act. However, we find that finally the assessee did appear during the assessment proceedings and assessment was completed u/s 147/143(3) of the Act. Under similar circumstances I.T.A.T. Lucknow Bench of the Tribunal in the case of Smt. Reeta Patel vs Income Tax Officer in I.T.A. No.598/Lkw/2016 has deleted the penalty observing as under:

“5. We have heard the rival parties and have gone through the material placed on record. We find that assessee during the

I.T.A. No.268/Lkw/2018 Assessment Year:2014-15 3

assessment proceedings did not comply with the notices issued u/s 142(1) on various dates which learned CIT(A) and Assessing Officer have noted in their order and therefore, the authorities below have imposed penalty u/s 271(1)(b) of the Act. However, we find that finally the assessee did appear before the assessment proceedings and assessment was completed u/s 143(3) and thereafter, the matter travelled upto Tribunal, which vide order dated 30/01/2017 allowed the appeal of the assessee for statistical purposes. Therefore, we do not see any reason to uphold the order of CIT(A). We reverse the same and allow the appeal filed by the assessee.”

Respectfully following the view taken in the above appeal, we do not see any reason to uphold the order of CIT(A). We reverse the same and allow the appeal filed by the assessee.

6.

In the result, the appeal of the assessee is allowed.

(Order pronounced in the open court on 31/01/2019)

Sd/. Sd/. ( A. D. JAIN ) ( T. S. KAPOOR ) Vice President Accountant Member

Dated:31/01/2019 *Singh

Copy of the order forwarded to : 1. The Appellant 2. The Respondent. 3. Concerned CIT 4. The CIT(A) 5. D.R., I.T.A.T., Lucknow Assistant Registrar

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