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2009 (12) TMI 669 - AT - Income TaxPenalty u/s 271(1)(b) - violation of notice u/s 142(1) - statutory notice u/s 142(1) was issued to the four assessees for assessment year 2006-07 only and not for any other assessment years - HELD THAT:- Before levying penalty under section 271(1)(b), there must be specific notice to the assessee for specific assessment year with specific requirements to be complied with. The compliance must have relevance to the assessment year in question and it must have apparent nexus with the assessment for that assessment year to be framed. General information sought may not be relevant for any particular assessment year. In addition, adequate time should be given to the assessee for making compliance. The notices were issued on 14-8-2007 in some cases and compliance were required to be made by 24-8-2007. Thereafter the Assessing Officer proceeded to initiate the penalty proceedings. In our considered view, it is against the principles of natural justice as no reasonable opportunity is given to them for making compliance of the information sought. The statutory provision for levy of penalty is not for mere technical non-compliance but for actual or habitual defaulters. On the face of present facts where the Assessing Officer has hastily proceeded to initiate penalty proceedings in all the cases, it is difficult to infer that these assessees were intending to make non-compliance, information sought by the Assessing Officer is very detailed and requires assistance from professionals like Advocate or Chartered Accountant. An affidavit has been filed from Shri Kaushal M. Khanna before the ld. CIT(A), i.e., erstwhile Chartered Accountant who was handling his tax matters, has left all these assessees and the family is in search of new counsel for making compliance made by the Income-tax Department. It shows that these assessees had really intended to comply with the notices and, therefore, it should not be inferred that there was a default which could invite penalty under section 271(1)(b). As decided in the case of Akhil Bhartiya Prathmik Shikshak Sangh Bhawan Trust [2007 (8) TMI 386 - ITAT DELHI-G] has held that if assessment order is passed u/s 143(3), and not u/s 144 then non-compliance is deemed to have been waived. Hence, we hold that neither the AO nor the Learned CIT (A) has made out a case for sustaining the penalties - Assessee appeal allowed.
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