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Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
O R D E R
PER PAVAN KUMAR GADALE.JM:
The appeal is filed by the assessee against the order of the Commissioner of Income Tax (Appeals) -34 Mumbai, passed u/s. 271(1)(b) and 250 of the Income Tax Act, 1961. The assessee has raised the sole ground of appeal:
“On the facts and in law nd in circumstances of the case. The Ld. CIT(A) has erred in law and facts in confirming penalty u/s 271(1)(b) of the Act.” Shri Vishal Vithal Kamat, Mumbai 2. The Brief facts of the case are that, the assessee has filed the return of income for the A.Y 2013-14 on 30.01.2014 with total income of Rs.7,27,170/- and the return of income was processed u/s 143(1) of the Act. Subsequently, the case was selected for scrutiny and notice u/s 142(1) of the Act along with questionnaire was issued. The A.O on perusal of the financial statements found that the assessee has received salary income, interest, service charges and income from business. The A.O has called for the details in respect of the claims of the assessee. In the course of hearing, the assessee was served with notices but none appeared and there is no proper compliance in respect of the details called for. Finally the assessment was completed u/s 143(3) of the Act.
Subsequently, the A.O. has initiated penalty proceedings u/s 271(1)(b) of the Act and found that the assessee has not disclosed reasonable cause for non compliance to the requirements of statutory notice u/s 142(1) of the Act and levied penalty of Rs. 10,000/- u/s 271(1)(b) of the Act and passed the order on 16.12.2015.
Aggrieved by the penalty order, the assessee has filed the appeal with the CIT(A), whereas, the CIT(A) has confirmed the action of the A.O and sustained the Shri Vishal Vithal Kamat, Mumbai penalty. Aggrieved by the CIT(A) order the assessee has filed an appeal with the Hon’ble Tribunal.
At the time of hearing, the Ld.AR of the assessee submitted that the assessee has cooperated in submitting the information before the A.O. The notices were issued on the old address of the assessee and there is a change in address which has been intimated to the income tax department. Further, there is no wanton act of the assessee for non compliance and supported his arguments with judicial decisions Contra, the Ld. DR supported the order of the Ld. CIT(A).
We heard the rival contentions and perused the material on record. Prima-facie, the A.O. has levied the penalty u/s 271(1)(b) of the Act as the assessee has not complied with the notices in spite of remainders in the scrutiny assessment proceedings. The Ld. AR of the assessee submitted that the assessee has not received the notices as the assessee has changed the address and the new address was intimated to the A.O. The Ld.AR referred to the paper book at page no 4, where the assessment order for the Asst Year 2013-14 was passed u/s 143(3) of the Act and the Ld. AR relied on the following judicial decisions (i) in the case of Shri Sushil Kumar Vs. DCIT. Kanpur And (ii) ITA No. Shri Vishal Vithal Kamat, Mumbai 738/Del/2014 in the case of Globus Infocon Ltd., Vs. DCIT. New Delhi.
We find the submissions of the Ld.AR are realistic. When the assessment is completed u/s 143(3) of the Act and not under section 144 of the Act, The penalty u/s 271(1)(b) of the Act cannot be imposed. Accordingly, considering the ratio of the judicial decisions and facts, we set aside the order of the CIT(A) and direct the A.O to delete the penalty and allow the ground of appeal of the assessee.
In the result, the appeal filed by the assessee is allowed.