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

These three appeals by the assessee 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.

Briefly stated, the facts of the case 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 assessee has filed the instant appeals.

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 had to complete 303 group assessments within a short span of five months and further one of its directors was in judicial custody. We find that the non- compliance of the statutory notices by the assessee was due to the large volume of work to be completed by the assessee 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 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/- each has been deleted. A copy of such order has been placed on record.

In the result, the appeals of the assessee are allowed.