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Income Tax Appellate Tribunal, KOLKATA BENCH “D” KOLKATA
Before: Shri N.V.Vasudevan & Shri Waseem Ahmed
O R D E R
PER Waseem Ahmed, Accountant Member:
- This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-6, Kolkata dated 09.01.2017. Assessment was framed by ITO Ward-24(2), Hooghly u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) vide his order dated 27.03.2015 for assessment year 2012-13. The penalty levied by AO u/s 271(1)(b) of the Act vide dated 112.11.2014. Grounds raised by assessee are reproduced below:- “1. FOR THAT the Ld. Commissioner of Income Tax (Appeals)-6, Kolkata failed to appreciate that none of the condition precedent required to be satisfied for the assumption of jurisdiction u/s.274 read with s. 271(1)(b) of the Income Tax Act, 1961 existed and/or have been complied with and/or fulfilled in the instant case by the Ld. Income Tax Munshi Mini Rice Mill Vs. ITO Wd-24(2) Hgl. Page 2 Officer, Ward 2(2), Hooghly and his specious action in upholding the impugned order dated 12-11-2014 imposing penalty in the sum of Rs.10,000/- in pursuance to notice dated 31-10-2014 is therefore Authorities Below initio void, ultra vires and ex-facie null in law.
2. FOR THAT the Ld. Commissioner of Income Tax (Appeals)-6, Kolkata acted unlawfully in upholding the invocation of mischief of the provisions of s. 271(1)(b) of the Income Tax Act, 1961 in the instant case by the Ld. Income Tax Officer, Ward 2(2), Hooghly for imposing penalty in the sum of Rs.10,000/- is based on extraneous parameters not germane to the issue and the specious conclusion reached de hors any compelling basis on that account is thoroughly opposed to law.
3. FOR THAT the Ld. Commissioner of Income Tax (Appeals)-6, Kolkata acted unlawfully in upholding the order imposing penalty us. 271(1)(b) of the INCOME Tax Act, 1961 passed by the Ld. Income Tax Officer, Ward 2(2), Hooghly without taking into consideration the ‘reasonable causes’ envisaged in the provision of s. 273B of the Income Tax Act, 1961 in relation to the facts and circumstances of the instant case and his purported findings on that behalf are completely9 unfounded, unjustified and untenable in law.”
2. The only issue raised by the assessee in this appeal is that Ld CIT(A) erred in confirming the penalty order of AO u/s 271(1)(b) of the Act.
3. Briefly, the facts are that the assessee is a partnership firm and engaged in the business of production of rice. The Assessing Officer during the course of assessment proceedings u/s 143(3) of the Act issued notices u/s 142(1)/143(2) of the Act on various dates but the assessee failed to comply the same. In view of above, the AO during assessment proceedings initiated penalty proceedings u/s 271(1)(b) of the Act. Finally, the AO after considering the reply of the assessee imposed the penalty for Rs. 10,000/- for the defaults committed by the assessee as discussed above.
4. Aggrieved, assessee preferred an appeal before Ld. CIT(A) who confirmed the order of the AO.
Aggrieved by this, the assessee has come up in appeal before us.
The ld. AR before us filed index of papers which was running pages from 1 to 52 and submitted that substantial compliances were made by the assessee during the course of assessment proceedings. Therefore no penalty Munshi Mini Rice Mill Vs. ITO Wd-24(2) Hgl. Page 3 in the instant case is called for. The Ld AR in this regard has relied on the order of Hon’ble ITAT in the case of Akhil Bhartiya Prathmik Shikshak Sangh Bhawan Trust Vs. Assistant Director of Income tax reported in 115 TTJ (Del) 419. The relevant extract reads as under:- “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”. On the other hand, the ld. DR vehemently supported the order of lower authorities.
We have heard the rival contentions of both the parties and perused and carefully considered the material on record; including the judicial pronouncements cited and placed reliance upon. At the outset it was observed that in the identical facts and circumstances the Hon’ble Delhi Tribunal has decided the issue in favour of assessee in the case of Akhil Bhartiya Prathmik Shikshak Sangh Bhawan Trust (Supra) by observing that the assessment was framed under section 143(3) of the Act which proves that substantial compliances were made by the assessee. Thus, it cannot be held that the default committed by the assessee was willful. Thus, we are inclined not to uphold the order of lower authorities. 6.1 Similarly, we also find that the Hon’ble Apex Court in the case of Hindustan Steel Limited v. State of Orissa reported in 83 ITR 26 (SC) has held that the penalty should not be imposed unless the assessee acted deliberately. The relevant extract of the judgment reads as under : “Obligation is the result of a quasi- criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged, either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will