PARTHA CHATTERJEE,HOOGHLY vs. ITO, WARD - 23(2), HOOGHLY, HOOGHLY

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ITA 2255/KOL/2017Status: DisposedITAT Kolkata19 December 2018AY 2013-143 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 if an assessment order is passed under Section 143(3) despite earlier non-compliance with notices, it implies subsequent compliance was accepted and earlier defaults were ignored. Therefore, the penalty under Section 271(1)(b) was not justified.

What were the facts?

The Assessing Officer levied a penalty under Section 271(1)(b) for non-compliance with notices under Sections 143(2) and 142(1). However, the assessment order was ultimately passed under Section 143(3).

What were the issues?

Whether penalty under Section 271(1)(b) can be sustained when the assessment order is passed under Section 143(3) despite initial non-compliance with notices.

Which sections of the Income-tax Act were involved?

Section 271(1)(b),Section 143(2),Section 142(1),Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA ‘D’ BENCH, KOLKATA

Before: Sri J. Sudhakar Reddy & Sri S.S. Viswanethra Ravi]

Date of concluding the hearing : October 16th, 2018 Date of pronouncing the order : December 19th, 2018 O R D E R Per S.S. Viswanethra Ravi, JM :-

This appeal filed by the assesse is directed against the order of the ld. Commissioner of Income Tax (Appeals) - 6, Kolkata, (hereinafter the ‘ld. CIT (A)’), passed u/s 250 of the Income Tax Act, 1961 (the ‘Act’), dt. 30/08/2017, for the Assessment Year 2013-14.

2.

After hearing rival contentions, we find that the sole issue that arises for adjudication in this appeal is the levy of penalty u/s 271(1)(b) of the Act. 2.1 The Assessing Officer levied this penalty on the ground that the assessee did not comply with the statutory notice u/s 143(2) and 142(1) of the Act, on 05/03/2015. We find that the assessment order was ultimately passed u/s 143(3) of the Act. The issue whether the penalty u/s 271(1)(b) of the Act, can be sustained when the assessment order has ultimately been passed u/s 143(3) of the Act.

Assessment Year: 2013-14 Partha Chatterjee 3. This issue is covered in favour of the assessee and against the revenue by the decision of the Akhil Bhartiya Prathmik Shmshak Sangh Bhawan Trust vs. ADIT; [2008] 115 TTJ 429, wherein it has been held as follows:- “Section 271(1)(b) of the Income-tax Act, 1961 - Penalty - For Non-Compliance of Notice under Section 143(2) - Where assessee had not complied with notice under section 142(1) but assessment order was passed under section 143(3) and not under section 144, that meant that subsequent compliance in assessment proceedings was considered as good compliance and defaults committed earlier were ignored by Assessing Officer and, therefore levy of penalty under section 271(1)(b) was not justified” 3.1. Respectfully following the same, we delete the penalty imposed u/s 271(1)(b) of the Act and allow this appeal of the assessee.

4.

In the result, appeal of the assessee is allowed.

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