BABU SINGH,GAUTAM BUDDHA NAGAR vs. ASSESSMENT UNIT, DELHI

This appeal is filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [CIT(A), in short] dated 10.03.2025 in Appeal No. NFAC/2014-15/10297028 arising out of order passed u/s 271(1)(b) of the Act, 1961 (hereinafter referred as ‘the Act’) dated 20.09.2023 for Assessment Year 2015-16.

Brief facts of the case are that the assessment of the assessee was completed vide order dated 21.03.2023 passed u/s 147/144 r.w.s 144B of the Act wherein the penalty proceedings u/s 271(1)(b) were initiated for non-compliance of the statutory notices. Thereafter, the AO proceeded with pending penalty proceedings u/s Babu Singh vs. Assessment Unit 271(1)(b) and in terms of order dated 20.09.2023 levied penalty of Rs.20,000/- for non-compliance of the statutory notices issued u/s 142(1) of the Act on 17.01.2023 and 01.02.2023.

Against such order, an appeal was preferred by the assessee before the Ld. CIT(A) who vide impugned order dated 10.03.2023 has dismissed the appeal of the assessee therefore, the assessee is in appeal before the Tribunal.

Before us, it is submitted by Ld. AR that the appeal filed against assessment order passed on 21.03.2023 u/s 147/144 r.w.s 144B of the Act stood set aside by the Ld. CIT(A), NFAC in terms of the order dated 26.03.2025 with the directions to make fresh assessment in accordance with Rule and timelines. Copy of the said order is placed before us in Paper Book at pages 4 to 11 filed by the assessee. The Ld. AR further submits that since the order under which satisfaction for initiation of present penalty proceedings stood set aside, therefore, consequent order of levying the penalty u/s 271(1)(b) is also liable to be cancelled.

On the other hand, the Ld. Sr. DR supports the lower authorities and submits that though the assessment order passed was set aside, however, facts remained that assessee has not made compliance to the statutory notices issued by AO during the course of assessment proceedings, therefore, penalty levied u/s 271(1)(b) of the Act is in accordance with law and such order deserves to be upheld.

Heard the parties and perused the materials on record. In the instant case, the assessment order passed u/s 147/144 dated 21.03.2023 ex-party wherein the AO has recorded his satisfaction for initiation of penalty proceedings u/s 271(1)(b) of the Act has been set aside by Ld. CIT(A) for fresh adjudication in terms of the order Babu Singh vs. Assessment Unit dated 26.03.2025 passed u/s 250 of the Act. Further the AO has given effect to such order on 14.05.2025 vide order passed u/s 250/147 r.w.s 144 of the Act and start proceedings for fresh assessment through ITBA, therefore, there remain no order under which satisfaction for initiation of penalty proceedings u/s 271(1)(b) was recorded. In view of these facts, we direct the AO to delete the penalty levied of Rs.20,000/- u/s 271(1)(b) of the Act. Accordingly, all the grounds of appeal are allowed.