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Income Tax Appellate Tribunal, MUMBAI BENCH “J”, MUMBAI
Before: SHRI G.S. PANNU & SHRI RAM LAL NEGI
Both the captioned appeals are directed against two respective orders dated 07.01.2016 of the CIT(A)-9, Mumbai whereby the penalty of Rs.10,000/- each levied by the Assessing Officer u/s 271(1)(b) of the Income Tax Act, 1961 (in short ‘the Act’) for Assessment Years 2007-08 and 2008-09 have been sustained. Since the facts and circumstances in both the appeals are identical, they have been clubbed and heard together and a consolidated order is being passed for the sake of convenience and brevity.
In brief, the relevant facts are that for both the Assessment Years 2007-08 and 2008-09, 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 two separate orders dated 7.11.2012 levying penalties u/s 271(1)(b) of the Act of Rs. 10,000/- each. The said levies have since been affirmed by the CIT(A), against which the assessee is in appeal before us.
Although the assessee has raised multiple Grounds of appeal, but the appeals are being disposed of by adverting to a short preliminary point based on the provisions of Sec. 274(1) of the Act. Sec. 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. In support, our attention has been drawn to the contents of the respective orders passed u/s 271(1)(b) of the Act as well as the corresponding assessment order passed u/s 144 of the Act for the instant assessment years. Notably, even the ld. 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 fact-situation, we find that the penalty of Rs.10,000/- each 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 Sec. 271(1)(b) r.w.s. 274(1) of the Act, has not been complied with. Thus, on this aspect itself penalty levied u/s 271(1)(b) of the Act for the captioned two assessment years is directed to be deleted.
In the result, assessee succeeds in both the appeals.
The above decision was pronounced in the open court in the presence of both the parties at the conclusion of hearing on 28th February, 2017.