M/S MDLR RESORT PVT. LTD.,NEW DELHI vs. DCIT, NEW DELHI

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ITA 4485/DEL/2015Status: DisposedITAT Delhi14 December 2017AY 2006-074 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 held that the non-compliance with statutory notices constituted a reasonable cause under Section 273B of the Act. Therefore, the penalties imposed were deleted.

What were the facts?

The Assessing Officer imposed penalties under Section 271(1)(b) for non-compliance with statutory notices. The CIT(A) upheld these penalties. The assessees contended that non-compliance was due to a director being in judicial custody and a large volume of work.

What were the issues?

Whether non-compliance with statutory notices due to a director's judicial custody and heavy workload constitutes a reasonable cause for penalty under Section 271(1)(b).

Which sections of the Income-tax Act were involved?

Section 271(1)(b),Section 273B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES : D : NEW DELHI

Before: SHRI R.S. SYAL & SHRI KULDIP SINGH

For Appellant: Shri Gautam Jain,&, Shri Piyush Kamal, Shri Amit Jain, Sr. DR
Hearing: 14.12.2017Pronounced: 14.12.2017

PER BENCH:

1.

These five appeals by two different but related assessees are directed against the confirmation of penalty amounting to Rs.20,000/- each under section 271(1)(b) of the Income-tax Act, 1961 (hereinafter also called `the Act’) in relation to the assessment years 2006-07 to 2008-09.

2.

Briefly stated, the facts of the cases are that the Assessing Officer imposed penalty u/s 271(1)(b) of the Act for non- compliance of the statutory notices. The ld. CIT(A) upheld the penalty. Aggrieved, the assessees have filed the instant appeals before the Tribunal.

3.

We have heard the parties and perused the relevant material on record. It was submitted by the ld. AR that the non-compliance of the statutory notices of hearing issued by the Assessing Officer was not intentional, but, was for reasonable cause as the assessee group had to complete 303 group assessments within a short span of five months and further one of their directors was in judicial custody. We find that the non-compliance of the statutory notices by the assessees was due to the large volume of work to be completed by the group in a short span of time, which constitutes a reasonable cause within the meaning of Section 273B of the Act. We, therefore, delete the penalties u/s 271(1)(b) of the Act. Our view is fortified by several orders including an order of the Tribunal dated 06.11.2017 in the case of another group concern of the assessee, namely, M.M. Buildcon Pvt. Ltd. vs. DCIT in to 4521/Del/2015, in which a similar penalty imposed u/s 271(1)(b) of the Act amounting to Rs.20,000/- has been deleted. A copy of such order has been placed on record.

4.

In the result, all the appeals of the assessees are allowed.

Order Pronounced in the open Court on 14.12.2017.

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