SHRI RAJ KUMAR ARORA,KANPUR vs. DEPUTY COMMISSIONER OF INCOME TAX,CENTRAL CIRCLE-1, KANPUR

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ITA 267/LKW/2018Status: DisposedITAT Lucknow31 January 2019AY 2009-103 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 noted that although there was initial non-compliance, the assessee eventually appeared and the assessment was completed. Following a precedent where penalty was deleted in similar circumstances due to subsequent compliance, the Tribunal reversed the CIT(A)'s order.

What were the facts?

The assessee failed to comply with notices issued under Section 142(1) during assessment proceedings initiated under Section 147. Consequently, the Assessing Officer imposed a penalty of Rs. 10,000 under Section 271(1)(b). The CIT(A) upheld this penalty.

What were the issues?

Whether penalty under Section 271(1)(b) is leviable for non-compliance with notices when the assessee subsequently complies and the assessment is completed.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 142(1),Section 271(1)(b),Section 143(3),Section 153(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 25/01/2018 pertaining to assessment year 2009- 10. In this appeal the assessee has taken as many as six 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 143(2) & 142(1) were issued fixing compliance on 09/09/2016. 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

I.T.A. No.267/Lkw/2018 Assessment Year:2009-10 2

made, the 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 compliance with notice issued u/s 142(1) could not be made on the date fixed for compliance owing to the fact that the counsel of the assessee was busy in filing requisite forms under the Income Declaration Scheme, 2016 as well as in finalization of balance sheet and income tax returns which were time barring on 17/10/2016. Subsequently the assessee had made compliance of notice dated 31/08/2016 and assessment order was finally passed u/s 147/153(3) of the Act. Considering the subsequent compliance, the penalty should have been deleted by learned CIT(A).

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 before 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 assessment proceedings did not comply with the notices issued

I.T.A. No.267/Lkw/2018 Assessment Year:2009-10 3

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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