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Income Tax Appellate Tribunal, KOLKATA ‘D’ BENCH, KOLKATA
Before: Shri P.M. Jagtap, Vice-(KZ) & Shri S.S. Viswanethra Ravi
Per Shri P.M. Jagtap, Vice-President (KZ):- This appeal filed by the assessee is directed against the order of ld. Commissioner of Income Tax (Appeals)-14, Kolkata dated 31.01.2018, whereby he confirmed the penalty of Rs.10,000/- imposed by the Assessing Officer under section 271(1)(b) of the Income Tax Act, 1961.
The assessee in the present case is an individual. In the assessment completed under section 143(3)/147 vide an order dated 30.03.2006, the total income of the assessee was determined by the Assessing Officer at Rs.53,20,630/-. He also initiated the penalty proceedings under section 271(1)(b) for the alleged non-appearance of the assessee during the course of assessment proceedings and since there was no satisfactory explanation offered by the assessee in response to the show-cause notice issued by the Assessing Officer during the course of the said proceedings, the Assessing Officer imposed a penalty of Rs.10,000/- under section 271(1)(b) of the Act. The penalty imposed by the Assessing Officer under section 271(1)(b) was challenged by the assessee in the appeal filed by the assessee before the ld. CIT(Appeals) and the following submission was made on behalf of the assessee during the course of appellate proceedings before the ld. CIT(Appeals) in support of his case:- “This instant appeal was preferred on being aggrieved by the penalty order passed by ld. A.O. imposing penalty of Rs. 10000.00 for non-compliance to the notice issued in course of assessment proceeding.
The assessment, in question, for the assessment year under consideration was completed u/s 143(3)/147 dated 30.03.2006 on a total income of Rs.53,20,632.00 against the returned income of Rs.41,624.00.
The penalty u/s 271(1)(b) of the Income Tax Act, 1961 for non- compliance to the notices issued by the Income tax department without any cause or reason. In this case the entire assessment order is absolutely silent, the date on which, the appellant failed to respond the notice fixing the date of hearing. (copy enclosed)
That in the penalty order passed by the ld. A.O. it has been pointed out that the appellant failed to appear on 29.11.2005, however, the assessment order mentions that in compliance to the notice u/s 142(1) compliance was made. Therefore, apparently there has not been any compliance from the face of the order.
In view of this the appellant states that compliance to the notices issued by the department was made and no default occurred. The penalty order imposing a penalty of Rs.10000.00 u/s 271(1)(b) of the Income tax act, 1961 may kindly be quashed, and for this act of kindness the appellant shall ever pray and Oblige”.
The submission made by the assessee as above was not found acceptable by the ld. CIT(Appeals) and he proceeded to confirm the penalty imposed under section 271(1)(b) for the following reason given in the impugned order:- “As all the grounds relate to the lone issue of levy of penalty u/s 271(1)(b), the same are considered together. During the assessment proceedings, the appellant was asked to appear 2
before the AO or furnish appropriate submission on 29.11.2015. However, on getting no response from the assessee the AO initiated penalty proceedings u/s. 271B during the currency of assessment proceedings. A letter fixing the hearing for such proceedings on 18.08.2016 was issued in this regard but could not be served. Later the same was served by affixation after failing to get it served through the inspector. In response, neither the assessee nor his authorized representative appeared before the AO nor furnished any submissions in this regard. Consequently; for single day of default the AO levied a penalty of Rs.10,000/- against which the appellant is in Appeal.
During the appellate proceedings, the A/R of the appellant argues that the assessment order is absolutely silent about the date on which the appellant failed to respond and, therefore, he pleads that the penalty levied may not be appropriate. A careful consideration was given to the appellant's contention. I observe that the AO has brought out clearly the date of default as 29.11.2015 in the penalty order. The appellant has not brought out any contrary evidence to the fact that notice for compliance on the said date has not been received. It is also not brought out whether there was any bonafide reason for non-compliance on the said date either during the penalty proceedings or during the appellate proceedings. It is also observed that AO has validly initiated the penalty proceeding by clearly mentioning this in the assessment order itself. I, therefore, do not find any merit in the appellant's contention that the date of default has not been mentioned in the assessment order. That the appellant has not appeared before the AO or furnished any submission on the said date and continued to do so during the penalty proceedings indicates the cavalier and non-challant attitude towards proper compliance of legal notices. That there is no bonafide reason on various dates of non-compliance sufficiently draws the conclusion that the breach of law is not merely a technical or venial breach but deliberate and a substantive one. In view of this the undersigned is not inclined to interfere with the penalty imposed. Appellant's grounds fall”.
Aggrieved by the order of the ld. CIT(Appeals), the assessee has preferred this appeal before the Tribunal.
At the time of hearing fixed in this case, none has appeared on behalf of the assessee. This appeal of the assessee is accordingly being disposed of ex-parte qua the assessee after hearing the arguments of the ld. D.R. and perusing the relevant material available on record. It is 3 observed that in the written submission filed before the ld. CIT(Appeals), specific objection was raised on behalf of the assessee regarding the exact date on which he had allegedly failed to appear before the Assessing Officer. It was contended in this regard that even though the date of default was mentioned as 29.11.2005 in the penalty order, there was no reference whatsoever to the said date stated to be fixed for hearing in the assessment order. A perusal of the relevant assessment order fully supports and substantiates this stand of the assessee. On the other hand, there is a clear mention of issue of notice by the Assessing Officer under section 142(1), which was duly complied with by the assessee by filing a written submission on 15.12.2005. It is also relevant to note here that the assessment was completed by the Assessing Officer under section 143(3)/147 after taking into consideration the submissions made by the assessee which goes to show that the details and documents required for the purpose of assessment were duly furnished by the assessee. Keeping in view all these facts and circumstances of the case, we are of the view that it is not a fit case to impose penalty under section 271(1)(b). We accordingly delete the said penalty imposed by the Assessing Officer and confirmed by the ld. CIT(Appeals) and allow this appeal of the assessee.
In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on January 30, 2019.