VIPUL IMPEX & INFRABUILD LTD.,MUMBAI vs. ACIT,CIR-4(2), MUMBAI

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ITA 2863/MUM/2016Status: DisposedITAT Mumbai08 November 2017AY 2010-113 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 the penalty was untenable because the assessee was not given a reasonable opportunity of being heard as required by Section 274(1) of the Act. The Tribunal followed its own previous order in the assessee's case for earlier assessment years.

What were the facts?

The Assessing Officer levied a penalty of Rs. 10,000/- on the assessee under Section 271(1)(b) for not responding to a questionnaire issued under Section 142(1). The CIT(A) confirmed this penalty.

What were the issues?

Whether the penalty levied under Section 271(1)(b) is valid without providing the assessee a reasonable opportunity of being heard as mandated by Section 274(1).

Which sections of the Income-tax Act were involved?

Section 271(1)(b),Section 142(1),Section 274(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES “L”, MUMBAI

Before: Shri Shamim Yahya & Shri Sandeep Gosain

For Appellant: Shri Darshan Gandhi
For Respondent: Shri M V Rajguru
Hearing: 24.10.2017Pronounced: 08.11.2017

Date of Hearing :24.10.2017 Date of Pronouncement : 08.11.2017 O R D E R

Per Sandeep Gosain, Judicial Member

1.

This appeal by the assessee is directed against the order of the CIT(A)-9, Mumbai, dated 07.01.2016, sustaining the penalty of ` 10,000/- levied by the Assessing Officer u/s. 271(1)(b) of the Income tax Act, 1961, for assessment year 2010-11.

2.

In brief, the relevant facts are the Assessing Officer noted that assessee did not respond to the questionnaire issued u/s 142(1) of the Act, dated 3.10.2012, fixing the date of hearing on 30.10.2012. For the said reason, the Assessing Officer passed order dated 7.11.2012 levying penalty u/s 271(1)(b) of the Act of `10,000/- The said penalty has been confirmed by the CIT(A), against which the assessee is in appeal before us.

3.

At the outset, the learned counsel for the assessee submitted that on identical facts, co-ordinate Bench of this Tribunal, vide order dated 28.02.2017, have deleted the penalty in the assessee‟s own case for A.Ys 2007-08 and 2008-09 in & 2862/Mum/2016. We have heard the parties and have gone through the material available on record along with the orders of the authorities below. We find that section 274(1) of the Act prescribes that no order imposing penalty under Chapter XXI which, inter-alia, includes the impugned penalty u/s 271(1)(b) of the Act, shall be made unless the assessee has been heard or has been given a reasonable opportunity of being heard. The plea of the assessee is that before levying penalty u/s 271(1)(b) of the Act, the requisite show-cause envisaged u/s 274(1) of the Act has not been issued. Notably, even the learned DR has not been able to show as to whether any notice u/s 271(1)(b) r.w.s. 274(1) of the Act was issued to the assessee for non-compliance of notice u/s 142(1) dated 3.10.2012 requiring compliance on 30.10.2012, before levy of impugned penalties.

4.

In view of the aforesaid facts and respectfully following the order of the Tribunal in the assessee‟s own case for A.Ys 2007-08 and 2008-09, we find that the penalty of Rs.10,000/- levied by the Assessing Officer is untenable inasmuch as the basic requirement of allowing the assessee a reasonable opportunity of being heard, as contained in section 271(1)(b) r.w.s. 274(1) of the Act, has not been complied with. Thus, penalty levied u/s 271(1)(b) of the Act is directed to be deleted.

5.

In the result, the appeal is allowed. Order pronounced in the open court on this day of 8th November 2017

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