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Facts
The assessee challenged the CIT(A)'s orders confirming penalties of Rs. 10,000 each for Assessment Years 2014-15, 2015-16, and 2016-17. These penalties were levied under section 271(1)(b) of the Act due to alleged non-compliance with notices, despite the assessments being completed under section 153A read with section 143(3).
Held
The Tribunal noted that if there was actual non-compliance, assessments should have been completed under section 144. However, completion under section 153A read with section 143(3) indicates that subsequent compliance was accepted, thereby ignoring earlier defaults. Following precedence, the Tribunal deleted the penalties under section 271(1)(b) as not justified.
Key Issues
Whether penalty under section 271(1)(b) for non-compliance with notices is justified when the assessment is completed under section 153A read with section 143(3) and not under section 144 of the Income Tax Act.
Sections Cited
271(1)(b), 153A, 143(3), 144, 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL,
Before: BEFORE SHRI GEORGE MATHANMANISH AGARWAL
These are These are appeals filed by the assessee against the filed by the assessee against the separate orders of the ld CIT(A), Bhubaneswar of the ld CIT(A), Bhubaneswar-2, all dated 13.11.2024 13.11.2024 confirming the penalty levied u/s.271(1)(b) penalty levied u/s.271(1)(b) of the Act of Rs.10,000/- each for the assessment year essment years 2014-15, 2015-16 & 2016-17,, respectively , respectively.
Shri Subit Kumar Sahu Subit Kumar Sahu, ld AR appeared for the assessee and Shri the assessee and Shri S.C.Mohanty, Sr. Sr. DR appeared for the revenue.
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Ld AR drew our attention to the respective assessment orders and penalty orders, which have been passed under:
Asst.Year Assessment order dt. Penalty order dt. 2014-15 25.9.2021 17.3.2022 2015-16 25.9.2021 17.3.2022 2016-17 25.9.2021 17.3.2022 It was the submission that the penalty proceedings were initiated by the Assessing Officer u/s.271(1)(b) of the Act solely due to non compliance of notices issued to the assessee. It was the submission that the assessment was completed u/s.153A r.w.s. 143(3) of the Act and thus, there remains no question of non-compliance during the course of assessment proceedings. Therefore, he prayed for deletion of the penalty so levied.
In reply, ld Sr DR vehemently supported the levy of penalty. It was the submission that the penalty is levied due to non-compliance of notices and, therefore, the levy of penalty should be confirmed.
We have considered the rival submissions. It is seen that although the AO has levied penalty in all the assessment years for non-compliance of statutory notices, however, at the same time, he has passed orders for all the assessment years’ u/s. 153A r.w.s 143(3) and not u/s.144 of the Act. Had there been non-compliance by the assessee, the orders should have been passed u/s.144 of the Act. The ITAT Delhi Benches in the case of Akhil Bhartiya Prathamik Shikshak Sangha Bhavan Trust vs ADIT, 115 TTJ P a g e 2 | 4 419 (Del) held that where the assessee had not complied the notices issued u/s.142(1) of the Act, but the assessment order has been passed u/s.143(3) and not u/s.144 of the Act, that meant that subsequent compliance of the assessment proceedings was considered as good compliance and default committed earlier were ignored by the Assessing officer. Therefore, levy of penalty u/s.171(1)(b) of the Act was not justified. Since the facts in all the appeals are identical of the case of Akhil Bhartiya Prathamik Shikshak Sangha Bhavan Trust (supra),by respectfully following the same, the penalty u/s.271(1)(b) of the Act is hereby deleted as in the instant cases also, as the assessments were finally completed u/s.153A r w.s143(3) of the Act and not u/s.144 of the Act.
In the result, appeals of the assessee stand allowed.