KRUPA REALTORSS LTD.,MUMBAI vs. DCIT ,CC-39, MUMBAI

The only common issue involved in these appeals relates to the levy of penalty u/s 271(1)(b) of the Act. The circumstances and factual matrix relating to these penalties are that the present assessees belong to Jai Crop Group, which comprises of more than 120 companies. In each case of the assessee, assessments of seven assessment years are in progress at the same time. There was a pressure of work for the assessee as well as the representatives attending to the assessment proceedings of the said Jai Crop Group cases. There was a search action u/s 132 of the Act on the said Group. In addition, there is a mounting pressure of audit work and supply of information to the auditors. The assessee had to submit explanations and the voluminous paper books contain 1800 papers prior to November, 2010. The assessment proceedings started in August, 2010 and they are getting time barred by December, 2010. In this back ground of the facts, AO issued noticed u/s 143(2) and 142(1) of the Act. Although the assessee could not attend to the said notices on the scheduled dates, assessee complied with the requirements of the said notices immediately thereafter. There was compliance on 26.8.2010 before the Assessing Officer and supplied necessary information / statements and the assessments were duly completed u/s 143(3) read with section 153A of the Act. No assessments were completed ex-parte in cases of the appeals under consideration.

In the above back ground facts of the case, Ld Counsel for the assessee submitted that certainly, in the minds of the assessees, there is no spirit of non- compliance to the notices issued by the AO. It is basically the pressure of work and the defects relating to the management of time that forced the assessee to not to comply with the said noticed immediately. Further, Ld Counsel for the assessee submitted that this is not the case of non-compliance to the assessment proceedings; but, merely a case of “belated compliance”. In any case, assessee complied and cooperated with the AO in computing the assessment u/s 143(3) of the Act. In these circumstances, as per the Ld Counsel, the penalties levied u/s 271(1)(b) of the Act should not be sustained. For this proposition, Ld Counsel for the assessee filed a decision of the ITAT, Mumbai Bench in the case of Shri Ramesh Kumar Jain vs. ACIT in ITA Nos.458 to 464/Mum/2013 (AYs 2004-05 to 2010-11), dated 23.9.2015 and ITAT, Delhi Bench decision in the case of Akhil Bharatiya Prathmik Shmshak Sangh Bhavan Trust vs. ADIT [2008] 115 TTJ 419 (Delhi) and prayed for deciding the present appeals in the lines of the said decisions of the Tribunal.

After hearing both the parties and on considering the above detailed factual matrix of each of the seven appeals, we are of the opinion, the assessees under consideration are eligible for relief. Further, we have also perused the cited decisions of the Tribunal (supra) which are relevant for the proposition that where the assessee had not complied with the notice u/s 142(1) but the assessment order was passed u/s 143(3) and not u/s 144 of the Act, that meant the subsequent compliance in the assessment proceedings was considered as good compliance and the defaults committed earlier were ignored by the AO and therefore, the levy of penalty u/s 271(1)(b) was not justified. Considering the same as well as respectfully following the decisions of the Tribunal and also following the principle of consistency, we are of the opinion that these are not the fit cases for invoking the provisions of section 271(1)(b) of the Act. Accordingly, grounds raised by the assessees in all the seven appeals are allowed.

In the result, all the seven appeals filed by the assessees are allowed. Order pronounced in the open court on 20th July, 2016. (SANJAY GARG) ACCOUNTANT MEMBER भुंफई Mumbai; ददनांक 20.07.2016 व.नन.स./ OKK , Sr. PS आदेश की प्रतिलऱपि अग्रेपिि/Copy of the Order forwarded to : अऩीराथी / The Appellant 1. प्रत्मथी / The Respondent. 2. 3. आमकय आमुक्त(अऩीर) / The CIT(A)- आमकय आमुक्त / CIT 4. ववबागीम प्रनतननधध, आमकय अऩीरीम अधधकयण, भुंफई / DR,

ITAT, Mumbai गार्ड पाईर / Guard file. 6. सत्मावऩत प्रनत ////