2018 (2) TMI 167 - AT - Income Tax

Penalty u/s 271(1)(b) - held that - As per section 271(1)(b) of the Act, the Assessing Officer or the ld. CIT, if satisfied that any person fails to comply with the notice u/s 142(1) of the Act, then a sum of ₹ 10,000/- for each failure has to be levied, In the present case, the assessee having complied with all the notices u/s 142(1) of the Act and there is a reasonable cause u/s 273B of the Act, therefore, no penalty u/s 271(1)(b) of ht Act can be levied. Assessment in the present case has already been completed for the impugned A.Y. u/s 152A r.w.s 143(3) of the Act for assessment year 2006-07 to 2011-12 and u/s 143(3) of the Act for assessment year 2012-13 vide order dated 27.02.2015 has been completed where the additions in different years have been made as is evident from the orders placed at pages 171 to 257 of the ld. CIT(A) against the order of assessment u/s 153A/143(3) dated 28.03.2016. Thus order having been passed u/s 153A/143(3) of the Act we set aside the impugned penalty order and direct the Assessing Officer to delete the penalty. Thus, all the grounds raised by the assessee are allowed.

Summary

Issues:
Appeals against confirmation of penalty u/s 271(1)(b) of the Income-tax Act, 1961 for assessment years 2006-07 to 2012-13.

Detailed Analysis:

Issue 1: Confirmation of Penalty by CIT(A)
The appeals were filed against the confirmation of penalty u/s 271(1)(b) of the Income-tax Act, 1961 by the Commissioner of Income Tax (Appeals) for the assessment years 2006-07 to 2012-13. The Tribunal noted that the appeals of both assessees were connected, involving identical issues, and thus decided to dispose of them together for convenience.

Issue 2: Penalty Imposed for Non-Compliance
In the specific case of Shri Subhash Sathe for assessment year 2007-08, a penalty of ?10,000 was imposed under section 271(1)(b) for non-furnishing of information as required under section 142(1) of the Act. The Assessing Officer had issued notices for compliance, and the replies provided by the assessee were deemed inadequate, leading to the penalty imposition.

Issue 3: Compliance with Notices
The Tribunal examined the compliance history of the assessee with the notices issued under section 142(1) of the Act. It was observed that the assessee had responded to the notices within the specified timelines and provided the required information and documents as per the queries raised by the Assessing Officer.

Issue 4: Justification for Penalty
The Tribunal considered the arguments presented by both sides, including the contentions of the assessee regarding the alleged foreign bank account. The Tribunal analyzed the statements recorded during the search operation, where the assessee had initially denied having a foreign account but later acknowledged its existence. The Tribunal found the assessee's explanations unconvincing and upheld the penalty imposition.

Issue 5: Tribunal's Decision
After a detailed review of the facts, compliance records, and arguments, the Tribunal concluded that the penalty under section 271(1)(b) could not be justified in the case of the assessee. The Tribunal highlighted the compliance with notices, reasonable cause under section 273B of the Act, and the completion of assessments for the relevant assessment years. Consequently, the Tribunal directed the Assessing Officer to delete the penalty imposed on the assessee.

Issue 6: Disposal of Appeals
The Tribunal extended its decision on penalty deletion to all connected appeals of both assessees, emphasizing the identical nature of the issues and facts involved. The Tribunal allowed all the grounds raised by the assessees, leading to the allowance of all appeals and the deletion of penalties imposed under section 271(1)(b) for the respective assessment years.

This comprehensive analysis covers the key issues addressed in the judgment, detailing the Tribunal's considerations and ultimate decision regarding the confirmation of penalties under section 271(1)(b) of the Income-tax Act, 1961.