M/S NAMAN FABTEX PVT LTD.,MUMBAI vs. ITO 4(3)(1), MUMBAI

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ITA 2454/MUM/2019Status: DisposedITAT Mumbai14 October 2020AY 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 found that the assessee had provided a reasonable explanation for the absence of the authorized representative on one date. Since no additions were made and all documents were furnished, the penalty levied was deemed unjustified.

What were the facts?

During scrutiny assessment, the assessee's authorized representative could not appear on one occasion due to a communication lapse regarding a notice under Section 142(1). The assessee's accountant had left for his native place without informing about the notice. Despite this, all requested documents were furnished, and no additions were made to the returned income.

What were the issues?

Whether the penalty under Section 271(1)(b) is leviable when the assessee provides a reasonable cause for non-compliance with a notice and no adverse findings are made in the assessment.

Which sections of the Income-tax Act were involved?

Section 271(1)(b),Section 142(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI

Before: SHRI VIKAS AWASTHY

For Appellant: Shri Rajendra Singh
For Respondent: Shri Ajai Pratap Singh
Hearing: 14/10/2020Pronounced: 14/10/2020

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-9, Mumbai (in short ‘the CIT(A)’) dated 26.03.2019 for Assessment Year 2014-15 confirming levy of penalty under Section 271(1)(b) of the Income Tax Act, 1961 (in short ‘the Act’).

2.

Shri Rajendra Singh appearing on behalf of the assessee submitted that in scrutiny assessment proceedings, the assessee was duly represented by its authorised Chartered Accountant. The assessee cooperated fully with the Assessing Officer in scrutiny assessment proceedings. It was only on one occasion that the Authorised Representative (in short ‘AR’) of the assessee could not appear due to lack of communication of notice issued under Section 142(1) of the Act. The Accountant of assessee, Shri Durgasankar Suthar without informing about notice left for his native place in Rajasthan. The ld. AR submitted that a perusal of the assessment order would show that whatever documents required by the Assessing Officer were duly furnished. No addition/disallowance was made by the Assessing Officer and income returned was accepted. The ld. AR prayed for deleting the penalty.

3.

On the other hand, Shri Ajai Pratap Singh representing the Department vehemently defended the impugned order. The ld. Departmental Representative (in short ‘DR’) submitted that the assessee/AR of the assessee defied notice issued under Section 142(1) of the Act. No plausible reason whatsoever was given by the assessee for non-appearance/defying notice before the Assessing Officer.

4.

We have heard the submissions made by rival sides and have examined the orders of the authorities below. Before the CIT(A), assessee has explained the reason for non-appearance of AR of the assessee on one of the dates. During scrutiny assessment proceedings it was explained that the Accountant of the assessee who is a resident of Janapur, Rajasthan without informing about receipt of notice under Section 142(1) of the Act left for his native place to be with his family. Hence, the AR could not attend the proceedings on one of the dates. A perusal of the assessment order reveals that whatever documents were called for by the Assessing Officer were furnished and no addition/disallowance was made in the returned income. I am satisfied that the assessee has been able to explain the reason for non-appearance of the AR of the assessee on one of the dates of hearing before the Assessing Officer. The impugned order is set-aside and the penalty levied under Section 271(1)(b) of the Act is deleted.

5.

In the result, appeal of the assessee is allowed.

Order pronounced in the open court on Wednesday, the 14th October, 2020.

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