PHASKOWA TEA PLANTATION LTD.,KOLKATA vs. D.C.I.T.,CIRCLE-4(2), KOLKATA

This appeal is preferred by the assessee against the order of Ld. CIT (Appeals) , 2, Kolkata dated 27-11-2018 for the assessment year 2015-16.

The main grievance of the assessee is against the action of the ld. CIT(A) in confirming the penalty of Rs. 30,000/- levied u/s. 271(1)(b) of the Income-tax Act, 1961 ( in short, hereinafter the ‘Act’). Even though none appeared on behalf of the assessee, we note that the impugned penalty has been levied for the fault that the assessee had not appeared when the AO summoned the assessee before him thrice. For non-compliance of the summons, we note that the AO had issued notice to the assessee to explain as to why the assessee did not comply with his notices issued to appear on 14/6/2016, 18/8/2017 and 24/10/2017. And thereafter, we note that the penalty was imposed on the reason that the assessee faulted to comply and appear before him on 14/6/16, 18/8/17 and 24/10/17. We note from perusal of the show cause notice proposing penalty that the AO had mentioned the fault of assessee was committed on 14/06/16. However, when the penalty was levied the two other dates i.e. 18/08/17 & 24/10/17 was mentioned additionally by the AO as the defaulting days for which penalty was levied. Thus, we note that the assessee was not given proper notice in respect of such default for which show cause notice for imposition of penalty was issued i.e on 18/8/17 & 24/10/17. Coming to the default of notice on 14/06/16, we note from the assessment order that the ld. JCIT(OSD) had issued notice on 22/4/16 fixing the case for hearing on 14-06-16. The AO notes that none appeared. However, the assessee filed written submission on 29/7/2016. Thereafter, he notes that Shri P.K. 1 A.Y 2015-6 Saraf, A/R of the assessee appeared from time to time and the case was heard. We note that the AO had finally passed the scrutiny assessment order on 26-03-2013 u/s. 143(3) of the Act, therefore, the imposition of penalty u/s. 274 r.w.s 271(1)(b) of the Act was not warranted. We note that AO issued to assessee notice seeking response for non-compliance on 14/6/16, 03/05/17 and 05/06/17 and pursuant to the same assessee gave explanations for non compliances in respect of these dates. We note that no opportunity was provided to the assessee by AO to explain non compliance on 18/8/17 and 24/10/17. We also note that assessee when given an opportunity had properly explained the reasons for non-compliance, which the AO brushed aside. In such circumstances, we hold that the ld.AR/assessee cannot be faulted with non- compliances before the AO and there was reasonable cause for non-appearance/non- compliance on the dates mentioned by the AO. We note that the assessee has not wilfully faulted from complying with the direction of AO. And taking note that assessee/ Ld AR appeared before the AO on several dates during assessment proceedings and furnished documents and finally AO framed the scrutiny assessment under section 143 (3) of the Act, the penalty was not warranted in the facts and circumstances of the case, and therefore, we delete the impugned penalty as imposed/confirmed by the Ld CIT(A).