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Facts
The assessee appealed against a penalty of ₹ 10,000 levied by the Assessing Officer under Section 271(1)(b) of the Income Tax Act for non-compliance with notices under Sections 143(2)/142(1). The core contention was that no show cause notice for this specific penalty was issued to the assessee prior to its imposition, violating principles of natural justice.
Held
The Tribunal held that the Assessing Officer's imposition of penalty under Section 271(1)(b) was invalid as no prior show cause notice for that specific penalty was issued to the assessee. Deeming this a violation of natural justice, the Tribunal concluded that the penalty could not be justified and therefore deleted it.
Key Issues
Whether penalty under Section 271(1)(b) can be levied for non-compliance of notices without issuing a prior show cause notice for such penalty, in accordance with principles of natural justice.
Sections Cited
Section 271(1)(b), Section 143(2), Section 142(1)
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Income Tax Appellate Tribunal, RANCHI BENCH, RANCHI
Before: SHRI GEORGE MATHAN & SHRI RATNESH NANDAN SAHAY
Assessee represented by Shri R.R. Mittal, AR. Department represented by Shri Khubchand T. Pandya, Sr.DR Date of hearing 21/08/2025 Date of pronouncement 21/08/2025 O R D E R PER: BENCH 1. This is an appeal filed by the assessee against the order of the ld. CIT(A), NFAC, Delhi in Appeal No. CIT(A), Hazaribagh/10012/2018-19 dated 21/09/2023 for the A.Y. 2015-16 2. Shri Rajiv Mittal, ld. A.R. represented the assessee and Shri Khubchand T. Pandya, ld. Sr. DR represented the revenue.
It was submitted by the ld. AR that the Assessing Officer levied penalty of ₹ 10,000/- under Section 271(1)(b) of the Act on the ground of non- compliance of notices issued by the Assessing Officer under Section 143(2)/142(1) of the Act, however, no show cause notice was ever issued to the assessee under Section 271(1)(b) of the Act before imposition of penalty
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ITA 29/Ran/2024 Maa Chintpurni Mining P ltd. Vs ITO which is against the principles of natural justice and therefore, deserves to be deleted.
In reply, the ld. Sr.DR vehemently supported the order of the ld. CIT(A).
We have considered the rival submissions. We find that no show cause notice was ever issued to the assessee under Section 271(1)(b) of the Act before imposing penalty under Section 271(1)(b) of the Act which is against the principles of natural justice and therefore, the action of the Assessing Officer cannot be justified from any angle. Thus, the penalty of ₹ 10,000/- imposed under Section 271(1)(b) of the Act is deleted.
In the result, the appeal of the assessee is allowed. Order announced in open court on 21/08/2025.