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2022 (8) TMI 1187 - ITAT VARANASIPenalty u/s. 271(1)(b) - As per AO assessee has not complied with the notice issued u/s 143(2) as neither anybody appeared nor adjournment application was received by the AO - AY 2015-16 - HELD THAT:- From the assessment order itself, it is clear that in compliance to the notices issued under section 143(2)/142(1) Sh. Ajeet Kumar Sarraf FCA and Sh. A.C. Bharadwaja, Advocate appeared from time to time and filed reply and details as well as produced bills and vouchers. These details and evidence produced by the assessee were also examined by the AO at length. Thus, from the assessment order, it is manifest that there was a due compliance by the assessee to the notices issued under section 143(2)/142(1) of the Act and further the AO has also not recorded any satisfaction in the assessment order for initiating the penalty under section 271(1)(b) - Thus the penalty levied by the Assessing Officer under section 271(1)(b) for the assessment year 2015-16 is not justified and the same is deleted. AY - 2016-17 - AO levied the penalty for non compliance of the notice issued under section 143(2) and 143(1). The Assessing Officer has not specified in the order as against which notice, whether issued under section 143(2) or 143(1), the penalty was levied. We further note that in the assessment order, the Assessing Officer has recorded the fact that in compliance to notice under section 142(1), the assessee furnished reply online alongwith audit report under section 44AB computation of income, balance-sheet , profit & loss account and details of interest claimed during the year. The assessee also furnished the details regarding monthly opening and closing stock as well as ledger copy of interest paid and interest received. After considering these details and explanation filed by the assessee in compliance to the notice issued under section 142(1), the Assessing Officer framed the assessment of return of income. Thus, it is clear that initially there was no compliance on behalf of the assessee to the notice issued under section 143(2) and 142(1) of the Income Tax Act but subsequently, the assessee furnished its reply along-with audit report as well as all the requisite details as recorded by the AO in the assessment order - AO was satisfied with the reply as well as the details and record produced by the assessee. Therefore, though the assessee made the compliance belatedly but it was prior to the assessment order and the Assessing Officer was satisfied with the reply and supporting evidence produced by the assessee and consequently the assessment was framed on the returned income. - Decided in favour of assessee.
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