Loading judgment…
Facts
The assessee, a partnership firm engaged in real estate, filed its return for AY 2016-17. The assessment was completed and later reopened. A penalty under Section 271(1)(b) was levied for non-compliance with statutory notices.
Held
The Tribunal held that the Assessing Officer was not correct in levying the penalty as the assessee had not failed to comply with the notices and had sought for necessary documents. The penalty was cancelled.
Key Issues
Whether the penalty levied under Section 271(1)(b) for alleged non-compliance with notices was justified when the assessee was seeking necessary documents and had sought adjournments.
Sections Cited
271(1)(b), 143(3), 148, 148A, 142(1), 144, 144B, 154, 151
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH
Before: DR. BRR Kumar & Shri T. R. Senthil Kumar
Assessment Year 2016-17 Shivam Prerna Income Tax Officer, Infrabuild Ward-3(3)(5), “Kamal Shanti”, Vs Ahmedabad Besides Bank of Baroda, Near Under Bridge, Sardar Patel Colony, Ahmedabad-380014, Gujarat PAN: ACXFS0355F (Respondent) (Appellant) Assessee Represented: Shri Mahesh Chhajed, A.R. Revenue Represented: Shri Rignesh Das, Sr. D.R. Date of hearing : 20-01-2025 Date of pronouncement : 28-02-2025 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-
This appeal is filed by the Assessee as against order dated 28.06.2024 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), confirming levied penalty of Rs.30,000/- under section 271(1)(b) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for non-compliance to the statutory notices issued by the Assessing Officer.
A.Y. 2016-17 Page No 2 Shivam Prerna Infrabuild vs. ITO
Brief facts of the case is that the assesse is a partnership firm engaged in the business of real estate, construction and sale. The assessee filed its Return of Income for the Asst. Year 2016-17 on 14-10-2016 declaring total income of Rs.19,520/-. Regular assessment u/s.143(3) was made on 25-08-2018 accepting the returned income. Then the return was reopened by issuing a notice u/s. 148 of the Act on 30-06-2021 and list of relevant dates are as follows:
Date Particulars 30.06.2021 Notice U/S 148 of the Act under old proceedings 13.07.2021 Appellant filed return in response to notice dated 30.06.2021 19.08.2021 Letter requesting to provide documents required to raise objection for validity of re-opening of assessment 12.11.2021 Notice U/s 143(2) of the Act alongwith Extract of reasons 15.11.2021 Reminder letter to provide documents to raise objection for validity of reopening of assessment 17.11.2021 Reminder letter to provide documents to raise objection for validity of reopening of assessment 24.11.2021 Objection filed against the reopening of assessment proceedings 27.05.2022 Notice U/s 148A(b) of the Act 14.06.2022 Objection filed against the reopening of assessment proceedings 23.06.2022 Letter to provide personal hearing 30.08.2022 Order passed U/s 148A(d) of the Act 30.08.2022 Notice issued U/S 148 of the Act 13.12.2022 Appellant filed return in response to notice dated 30.08.2022 20.01.2023 Notice u/s 143(2) r.w.s 147 of the Act 20.01.2023 Notice u/s 142(1) of the Act 03.02.2023 Rectification application was filed before PC1T-3 and ITO .02.2023 Reply to notice dated 20.01.2023 10.05.2023 Show cause notice was issued 16.05.2023 Application for Adjournment filed in response to show cause notice 24-05-2023 Order u/s. 144 r.w.s. 144B of the Act A.Y. 2016-17 Page No 3 Shivam Prerna Infrabuild vs. ITO 2.1. The Ld. AO held that there is failure of compliance to notice issued U/s. 142(1) of the Act dated 19.04.2023, 28.04.2023 and 06.05.2023 and therefore levied penalty U/s. 271(1)(b) of Rs.30,000/-.
Per contra, the assessee submitted that there is no failure on the part of the assessee to comply with the statutory notices, whereas the A.O. has not provided the documents as requested by the assessee repeatedly. On Appeal, the assessee requested to delete the penalty which was not accepted by the Ld. CIT(A) but confirmed the same.
Aggrieved against the same, the assessee is in appeal before us raising the following Grounds of Appeal:
1. The order passed by the Ld. CIT (A) is against law, equity & justice.
2. The Ld. CIT (A) has erred in law and on facts in upholding penalty levied by the Ld. AO U/S 271(1)(b) of the Act as same has been initiated for vague and non-specific default u/s 142(1) of the Act by the Ld. AO.
3. The Ld. CIT(A) has erred in law and on facts in upholding penalty levied as penalty order has been passed without prior approval of Joint Commissioner.
4. The levy of penalty is bad & illegal as it being time barred.
5. The Ld. CIT (A) has erred in law and on facts in upholding penalty levied by the Ld. AO as assessment proceedings initiated by the Ld. AO is without jurisdiction hence all the subsequent notices and penalty proceedings are also void and illegal
6. The Ld. CIT(A) has erred in law and on facts in upholding penalty levied by the Ld. AO U/S 271(1)(b) of the Act of Rs.30,000/- for vague non-compliance of notices issued U/S 142(1) of the Act A.Y. 2016-17 Page No 4 Shivam Prerna Infrabuild vs. ITO
The appellant Craves liberty to add, amend, alter or modify all or any grounds of appeal before final appeal.
We have heard the rival submissions and perused the materials available on record. It is seen from the list of Dates and Events, the assessee sought for details for reasons for reopening of assessment, however the same was not provided to the assesse in spite of reminders sent by the assessee. Further the assessee placed on record its rectification application filed u/s. 154 of the Act dated 06-02-2023 before the A.O. on the very same reopening of assessment and sanctioning obtained u/s. 151 of the Act, itself is bad in law. It is not on record, any order is being passed against the rectification application. Regarding the hearing on 10-05-2023, the assessee sought for an adjournment for 10 days. Thus it is not the case of the assessee has not replied to the notices issued by the Assessing Officer and failed to comply with the notices. Therefore in the above facts and circumstances of the case, in our considered view, the A.O. was not correct in levying penalty u/s. 271(1)(b) of Rs. 30,000/-. Therefore the penalty levied is hereby cancelled.
In the result, the appeal filed by the Assessee is allowed.
Order pronounced in the open court on 28 -02-2025 Sd/- Sd/- (DR. BRR KUMAR) (T.R. SENTHIL KUMAR) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad : Dated 28/02/2025 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee A.Y. 2016-17 Page No 5 Shivam Prerna Infrabuild vs. ITO