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Facts
The assessee's assessment was completed by the AO accepting the returned income. Subsequently, the AO levied a penalty of Rs.20,000/- under Section 271(1)(b) for alleged non-compliance with two notices, which was later confirmed by the Ld.CIT(A).
Held
The Tribunal found that the assessee had, in fact, responded to the notices, albeit belatedly, with e-proceedings acknowledgements available on record. Given that the AO ultimately accepted the returned income in the assessment order, the Tribunal concluded that the penalty imposed under Section 271(1)(b) was not warranted and directed its deletion.
Key Issues
Whether penalty under Section 271(1)(b) for non-compliance with notices under Section 142(1) is justified when the assessee provided a belated response and the assessment was completed accepting the returned income.
Sections Cited
271(1)(b), 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI JAGADISH
आदेश / O R D E R
PER ABY T. VARKEY, JM:
1. This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)/NFAC, (hereinafter in short "the Ld.CIT(A)”), Delhi, dated 26.07.2024 for the Assessment Year (hereinafter in short "AY”) 2015-16 confirming the penalty levied u/s.271(1)(b) of the Income Tax Act, 1961 (hereinafter in short "the Act”).
The brief facts are that assessment was framed by the AO accepting the returned income of Rs.1,33,43,420/- by order dated 24.05.2023.
Thereafter, the AO initiated penalty against the assessee u/s.271(1)(b) of the Act for not responding to his two (2) notices dated 02.02.2023 & dated 28.04.2023; and being not satisfied with the reply of the assessee, levied penalty of Rs.10,000/- for each default [total Rs.20,000/-], and the Ld.CIT(A) has confirmed the penalty.
We have heard both the parties and perused the material available on record. The Ld.AR brought to our notice that the assessee had in fact replied to the notices issued by the AO u/s.142(1) of the Act on 02.02.2023 & 28.04.2023 by replying on 10.04.2023 & 15.05.2023 respectively and in order to prove this fact, drew our attention to Page No.4-9 of the Paper Book, which reveals that assessee has replied to the notice of the AO dated 02.02.2023, by reply dated 10.04.2023 a copy of which is found placed at Page Nos. 8 & 9 of the Paper Book wherein the e-proceedings response acknowledgment is found placed along with the reply at Page No.9 of the Paper Book. Likewise, the notice dated 28.04.2023 issued by the AO is found placed at Page Nos.10-13 of the Paper Book and the assessee’s reply is found placed at Page Nos.14-17 of the Paper Book. At Page No.14 e-proceedings response acknowledgment in respect of the notice dated 28.04.2023 uploaded by the assessee on 05.05.2023 is found placed along with the reply of the assessee at Page Nos.16-17 of the Paper Book. In such a scenario, since the AO has charged the assessee for default in replying to his two (2) notices dated (AY 2015-16) Venkatesh Durai Yamuna 02.02.2023 & 28.04.2023 which we find assessee has answered/replied as noted supra albeit belatedly; and moreover, it is noted that ultimately the AO has accepted the return filed by the assessee while passing the assessment order dated 24.05.2023, and hence, we are of the opinion that the penalty is not warranted in the facts and circumstances of the case. Therefore, we direct the AO to delete the penalty levied of Rs.20,000/- [Rs.10,000/- for each default].
In the result, appeal filed by the assessee is allowed.