2018 (1) TMI 1433 - AT - Income Tax

Penalty u/s 271(1)(b) - non comply with the notices issued u/s 142(1) - Held that - We find that assessee during the assessment proceedings did not comply with the notices issued u/s 142(1) on various dates which learned CIT(A) and Assessing Officer have noted in their order and therefore the authorities below have imposed penalty u/s 271(1)(b) of the Act. However we find that finally the assessee did appear before the assessment proceedings and assessment was completed u/s 143(3) and thereafter the matter travelled upto Tribunal which allowed the appeal of the assessee for statistical purposes. Therefore we do not see any reason to uphold the order of CIT(A). We reverse the same and allow the appeal filed by the assessee.

Summary

Issues: Appeal against penalty u/s 271(1)(b) for non-compliance with notices u/s 142(1) during assessment proceedings.

Analysis:
1. The appeal was filed by the assessee against the order of CIT(A) confirming a penalty of Rs. 10,000 under section 271(1)(b) of the Income Tax Act.
2. The appellant argued that the Tribunal in the quantum proceedings had set aside the appeal to the office of the Assessing Officer, indicating that the appeal filed by the assessee should be allowed.
3. The Departmental Representative (D. R.) heavily relied on the orders of the lower authorities, emphasizing that the penalty was imposed due to the assessee's failure to comply with notices under section 142(1) on multiple dates.
4. After hearing both parties and examining the evidence, it was found that the assessee had indeed not complied with the notices issued under section 142(1) during the assessment proceedings, leading to the imposition of the penalty by the lower authorities.
5. However, it was noted that the assessee eventually appeared before the assessment proceedings, and the assessment was completed under section 143(3). Subsequently, the matter reached the Tribunal, which, in a previous order, allowed the appeal of the assessee for statistical purposes.
6. Considering these circumstances, the Tribunal found no valid reason to uphold the order of the CIT(A) confirming the penalty. Therefore, the Tribunal reversed the decision of the CIT(A) and allowed the appeal filed by the assessee.
7. Consequently, the appeal of the assessee against the penalty under section 271(1)(b) was allowed, and the order to that effect was pronounced in the open court on 11/01/2018.