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Income Tax Appellate Tribunal, “G ” BENCH, MUMBAI
Before: SHRI D.KARUNAKARA RA0 & SHRI C.N. PRASAD,
आदेश / O R D E R
PER C.N. PRASAD, JM:
These two appeals are filed by the assessee against the common orders of the Ld. CIT(A)-38, Mumbai dated 05.09.2014 pertaining to assessment years 2010-11 & 2011-12 in sustaining the penalty levied u/s. 271(1)(b) of the Act .Both these appeals were heard together and they are disposed of by this common order for the sake of convenience.
Brief facts are that in these cases notices u/s. 142(1) and 143(2) were issued on 10.8.2012 and the assessee did not respond to the said notices issued by the Assessing Officer and therefore penalty u/s. 271(1)(b) was levied. It is seen that on 10.8.2012 notice u/s. 143(2) was issued and it was served fixing the date of compliance on 21.8.2012. Similarly notice u/s. 142(1) was issued on 4.12.2012, served on the assessee fixing the date of compliance on 10.12.2012. However assessee did not comply with the notice on the scheduled date. Therefore, explanation was called for as to why penalty should not be levied u/s. 271(1)(b). In response to the said notice, the assessee filed a letter dated 13.5.2013 and submitted that there were 8 assessees in the group and total 55 search assessments were in progress hence there was minor delay in submission of the details. The assessee placing reliance on the decision of the Hon’ble Supreme Court in the case of Hindustan (83 ITR 26) submitted that penalty is not leviable for technical and venial breach and there is no willfull attempt to not comply with the notices. .
The Ld. Counsel for the assessee submits that the Assessing Officer rejecting the explanation of the assessee and by observing that the assessee miserably failed to comply with the notices issued from time to time and placing reliance on the decision of Hon’ble Supreme Court in the case of CIT Vs M/s. Dharmendra Textile Processors (306 ITR 277) held that levy of penalty is a civil liability and willful concealment is not essential ingredient for attracting a civil liability, penalty u/s. 271(1)(b) was levied for the failure of the assessee in complying with notices issued on two occasions i.e. 143(2) dated 10.8.2012 and 142(1) dated 4.12.2012 at Rs. 10,000/- each. Similar penalty was levied for Assessment Year 2010-11 also for not complying with the notices issued u/s. 143(2) and 142(1) dated 10.8.2012 and 4.12.2012 respectively.
The Ld. Counsel for the assessee further submits that it is the finding of the Assessing Officer that the assessee’s authorized representative responded to the notice issued u/s. 143(2) dated 10.8.2012 and filed the details and information and the assessment was completed after the discussions. He submits that when the assessment was completed u/s. 143(3) and not u/s. 144, penalty u/s. 271(1)(b) is not justified since the assessee has co-operated in the assessment proceedings and necessary details were filed, therefore subsequent compliances are good compliance and the assessment was completed u/s. 143(3) of the Act. He places reliance on the decisions of the Delhi Bench in the case of Akhil Bhartiya Prathmik Shmshak Sangh Bhawan Trust Vs ADIT (115 TTJ 419) and also the decision of the Co-ordinate Bench in the case of JIK Industries Ltd Vs DCIT in to 4765/Mum/2014 dated 18.2.2016 in support of his contention that when assessment proceedings were completed and assessment order was passed u/s. 143(3) and not u/s. 144, it is unfair and unjustified in levying penalty u/s. 271(1)(b) of the Act.
The Ld. Departmental Representative placing reliance on the order of the Assessing Officer submits that assessee willfully not responded to the notice, therefore penalty was rightly levied.
Heard both sides and perused the orders of the authorities below and the case laws referred to above. We have also perused the assessment order and the penalty order. In the assessment order, it is the finding of the Assessing Officer that in response to notice u/s. 143(2) and 142(1) issued on 10.8.2012, the authorized representative of the assessee filed details and information and the case was discussed with him. Thereafter, the assessment was completed u/s. 143(3) on 22.3.2013. In the penalty order, the Assessing Officer observed that penalty was levied with reference to notice issued u/s. 143(2) dated 10.8.2012 and notice issued u/s. 142(1) dated 4.12.2012. It is the submission of the assessee that there were 8 assessees in the group and total 55 search assessments were in progress and hence there was minor delay in submission of details. We also find that in response to the notice u/s. 143(2) and 142(1) dated 10.8.2012, the authorized representative filed the details and information and the case was discussed with him and finalized the assessment u/s. 143(3) of the Act. The fact that there were 8 assessees in the group and 55 search assessments were in progress is also not denied by the Assessing Officer. Therefore, we are of the view that there is reasonable cause in filing the details by the assessee with a little delay and not responding on the scheduled dates mentioned in the notices.
In the case of Akhil Bhartiya Prathmik Shmshak Sangh Bhawan Trust (supra), the Delhi Bench has considered a situation where the assessment was completed u/s. 143(3) not u/s. 144 and assessee has not complied with some of the notices and in such circumstances it was held that when once the assessment was completed u/s. 143(3) and not u/s. 144, the subsequent compliance by the assessee in the assessment proceedings was considered as good compliance and the defaults committed earlier were to be ignored and penalty u/s. 271(1)(b) is not attracted. While holding so, the Tribunal observed as under:
“2.5. We also find that finally the order was passed u/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 Assessing Officer. Therefore, in such circumstances, there could have been no reason to come to the conclusion that the default was willful.
2.6. In view of the aforesaid discussion, it is held that the Ld. CIT(A) was not right in upholding the levy of penalty. Thus, the appeal is allowed”.
Similar view has been taken by the Co-ordinate bench in the case of JIK Industries Ltd (supra) after considering the judgement of the Hon’ble Supreme Court in the case of Hindustan steel Ltd. (supra) and the Delhi Bench in the case of Akhil Bhartiya Prathmik Shmshak Sangh Bhawan Trust (supra) by observing as under:
“Rather, it is noted that subsequently details and documents were filed by the assessee to the AO on the basis of which assessment proceedings were completed and assessment order was passed u/s 143(3) and not u/s 144. Thus, it shows that subsequently, compliance has been made by the assessee. Under such circumstances, in our considered opinion without giving adequate time and without making out a case of 6 JIK Industries Ltd. substantive non-compliance by the assessee, it was unfair and unjustified on the part of the AO in levying the penalty u/s 271(1)(b). In the totality of the facts and circumstances of the case, we find that levy of penalty was not justified. The action of the AO is unsustainable in the eyes of law, and therefore, we direct the AO to delete the penalty”.
In view of the above discussion, we hold that this is not a fit case for levy of penalty u/s. 271(1)(b) of the Act. Thus, we delete the penalty levied by the Assessing Officer u/s. 271(1)(b) of the Act for both the Assessment Years 2010-11 and 2011-12.
In the result, both the appeals of the assessee are allowed.
Order pronounced in the open court on 12th August, 2016.