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Income Tax Appellate Tribunal, DELHI BENCH: ‘F’: NEW DELHI
Before: SHRI G.D. AGRAWAL, HON’BLE & SHRI SUDHANSHU SRIVASTAVA
This appeal filed by the assessee is directed against the order passed by the Ld. CIT(A)-2, New Delhi vide order dated 21.07.2015 for Assessment Year 2012-13 wherein he has upheld the imposition of penalty of Rs. 10,000/- imposed u/s 271(1)(b)of the Income Tax Act, 1961 (the Act).
ITA 5737/Del/2015 Assessment Year 2012-13 2. The grounds of appeal read as under:-
“1. That the impugned order dated 21.07.2015 passed u/s 271(1)(b) by the learned Commissioner of Income-tax (Appeals) 2, New Delhi is bad in law and wrong on facts.
That on the facts and in the circumstances of the case, the Learned Commissioner of Income Tax -Appeals 2 erred in law in upholding the penalty of Rs. 10,000 levied by the Ld. Assessing Officer under section 271(1) (b) of the Act, for the reasons stated in the impugned Order.
That the appellant, craves, leave to add, alter, amend, substitute, forgo, any or all the grounds of appeal
before or at the time of hearing.”
3. An application was received on behalf of the Ld. Senior DR stating that the Ld. Senior DR was absent and adjournment was sought by the department on this ground. However, looking into the facts of the case, we reject the adjournment application and proceed to hear the case ex parte qua the department.
The Ld. Authorised Representative submitted that the assessee had been regularly attending the assessment proceedings and had filed the required details from time to time and had no intention whatsoever to avoid the hearings. It was also submitted that as the assessment proceedings were at short intervals, the delay in furnishing required details could have happened but there was no non-compliance on the part of the ITA 5737/Del/2015 Assessment Year 2012-13 assessee. Our attention was also drawn to page 1 and 2 of the penalty order dated 14.1.2015 wherein the assessee’s reply to the penalty notice issued on 9.1.2015 has been reproduced. It was also submitted that the assessment was completed u/s 143(3) of the Act which was proof enough that the assessee had duly cooperated during the course of assessment proceedings.
Reliance was placed on the order of the ITAT Delhi Bench in the vs ACIT 115 TTJ 419 (Del) for the proposition that when the order is finally passed u/s 143(3) of the Act and not u/s 144 of the Act, it would mean that subsequent compliance in the assessment proceedings was considered as good compliance and the defaults committed earlier were ignored by the Assessing Officer. Reliance was also placed on another order of the ITAT Delhi Bench in Globus Inforcom Limited vs DCIT in wherein the decision of the Coordinate Bench of ITAT Delhi in the vs ACIT had been followed. It was prayed that the penalty imposed may kindly be deleted.
We have heard the submissions of the Ld. Authorised Representative and have also perused the relevant material ITA 5737/Del/2015 Assessment Year 2012-13 placed on record. We find that the instant appeal is squarely covered by the decision of the Co-ordinate Bench of ITAT Delhi in the case of Akhil Bhartiya Prathmik Shikshak Sangh Bhawan trust vs ACIT 5 DTR 429 (Delhi Tribunal) wherein the Coordinate Bench in paras 2.4 and 2.5 has held as under:-
“2.4 Coming to the issue of recording of satisfaction, it may be mentioned that mere initiation of penalty does not amount to satisfaction as held by Hon’ble Delhi High Court in the case of CIT vs. Ram Commercial Enterprises Ltd. (2001) 167 CTR (Del) 321 : (2000) 246 ITR 568 (Del). In absence of recording of the satisfaction in the assessment order, mere initiation of penalty will not confer jurisdiction on the AO to levy the penalty. 2.5 We also find that finally the order was passed under s. 143(3) and not under s. 144 of the Act. This means that subsequent compliance in the assessment proceedings was considered as good compliance and the defaults committed earlier were ignored by the AO. Therefore, in such circumstances, there could have been no reason to come to the conclusion that the default was willful.”
As the facts of this case are identical, we hold that the imposition of penalty u/s 271(1)(b) of the Act was patently wrong, especially in view of the fact that the impugned assessment order has been passed u/s 143(3). While setting aside the impugned order, we direct the Assessing Officer to delete the penalty.
In the result, the appeal of the assessee is allowed.
ITA 5737/Del/2015 Assessment Year 2012-13 The order is pronounced in the open court on 20th September, 2017.