TMI Blog2021 (4) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee before the AO, therefore, considering the totality of the facts of the case it is not a fit case for levy of penalty u/s 271(1)(b) - Decided in favour of assessee. - ITA Nos. 6203 & 6204/Del/2019 - - - Dated:- 31-3-2021 - Shri R.K. Panda, Accountant Member For the Assessee : Shri Anil Jain, CA For the Department : Shri Frat Khan, Addl. CIT(DR) ORDER PER R.K. PANDA, AM The above two appeals filed by the assessee are directed against the common order dated 27/05/2019 of the Ld. CIT(A), 27, New Delhi for the assessment years 2011-12 and 2012-13 respectively. Since common grounds have been raised by the assessee in both the appeals, therefore, these were heard together and are being disposed of by this common order. 2. The only grounds raised by the assessee in both the appeals relate to the order of the Ld. CIT(A) in confirming the penalty of ₹ 10,000/- each u/s 271(1)(b) levied by the AO. 3. Facts of the case, in brief, are that notices u/s 153A of the I. T. Act, 1961 were issued on 22.09.2017 for A.Ys. 2011-12 to 2016-17 and notices u/s 143(2) were issued on 22.09.2017 f o r A. Y. 2017 - 18. On 13.08.2018 notice u/s 142(1) alongwith ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not sufficient, penalty u/s 271(l)(b) cannot be levied. For this proposition, reliance is placed on the judgment of the Hon'ble Delhi ITAT in the case of Chogori Distribution (P) Ltd vs DCIT, ITA 4435/Delhi/2015. 4. The assessment has been completed by the Ld AO u/s 153A/ 143(3). And various higher authorities has held that when assessment has been completed u/s 143(3), penalty u/s 271(1)(b) cannot be imposed. For this proposition, Reliance is placed on the following judgments: i. Globus Infocom Limited, New Delhi vs DCIT, Delhi ITAT, ITA 738/Del/2014 ii. Akhil Bhartiya Prathmik Shikshak Sangh vs Assistant Director of income Tax, Delhi ITAT, ITA 2900/Del/2005 5. However, the Ld. CIT(A) was not satisfied with the arguments advanced by the assessee and sustained the penalty levied by the AO for both the years by observing as under :- 6. All the grounds relate to issue of penalty u/s 271(l)(b) and are decided as under: 6.1 The chronology of events is as under: Search and seizure operation was carried out in the Nayyar group on 18.11.2016. The case was centralized with Central Circle-19, New Delhi on 10.04.2017 and notices u/s 153A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the AO with a letter stating that the notice dated 5.10.2018 was not received by it before 25.10.2018. He claims that the AO had written in his own hand writing on similar letter in the case of group assessee Mr. Neetu Nayyar to appear in person discuss with all facts why notice was not received. As per the assessment records, neither there is any such letter in the case of the appellant on record nor any evidence had filed before the AO to support its stand of non receipt of notice u/s 142(1). 6.3.1.1 Further the appellant had taken the without prejudice stand that even if it is presumed that notice was received within 2-3 days of date of issue on 16.10.2018, there was not enough time to respond these queries by 25.10.2018. It is observed from the sequence of events given in above para that there was no compliance of notices u/s 142(1) issued on 30.08.2018 05.10.2018 and the AO was forced to issue penalty notices on -09.11.2018 and subsequently prosecution notice on 19.11.2018 to elicit response from the appellant, which was first made on 07.12.2018. The AO was left with no option but to levy penalty on 6.12.2018 even after waiting for one half month for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ote that assessee did not furnish requisite details which were called for via different notices issued from this office time to time. The first reply of the assessee was received only when penalty under section 271(1)(b) was imposed upon him. During search and seizure operation various incriminating material and papers was found whose verification was only possible when assessee could have co-operated, but assessee tried to delay assessment proceedings in order to hinder proper investigation. However, notices and reminders were issued time to time and various third party verification was done to bring facts on record. Thus it is clear that AO was severely prejudiced by the continuous default of non compliance without any reasonable cause on the part of the appellant. Even the prosecution notice u/s 276D was issued by the AO, whose further action is still pending. The final orders have been passed by the AO u/s 143(3) r.w.s 153A as there was subsequent compliance by the appellant, but the details had to be accepted on face of it by the AO due to no time left for investigation or verification of these details from independent sources. In fact, the compliance of the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l before the Tribunal. 7. Ld. Counsel for the assessee strongly challenged the order of the Ld. CIT(A) in confirming the levy of penalty u/s 271(1)(b) of the I.T. Act for all these years. He submitted that the assessment in the instant case was ultimately completed u/s 143(3) of the Act. Referring to various decisions filed in the synopsis Ld. Counsel for the assessee submitted that it has been held in all these decisions that where the assessee has not made any compliance on certain dates but ultimately due compliance was made and replies filed by the assessee and had participated in the proceedings before the AO and the assessment has been completed u/s 143(3) then penalty should not be levied u/s 271(1(b) of the Act for non compliance of particular notice merely on technical grounds. He submitted that the AO in the instant case has levied penalty for non compliance to the notice dated 5th October 2018 whereas in the show cause notice dated 9.11.2018 the AO has mentioned that there was non compliance of notice u/s 142(1) dated 16th October 2018. He submitted that even for the sake of arguments if the above notice was received within two three days of the notice dated 16th O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have held that where the assessment order was finally passed u/s 143(3) and not u/s 144 of the Act due to subsequent compliance during the assessment proceedings, that would be considered as good compliance and the defaults committed earlier should be ignored and taking a lenient view the penalty u/s 271(1)(b) of the I.T. Act 1961 should not be levied. Further, the Coordinate Bench of the Tribunal in the case of one of the group member namely Smt. Neetu Nayyar vs ACIT and Smt. Meena Nayyar vs. ACIT (supra) has also deleted the penalty levied by the AO u/s 271(1)(b) and sustained by the Ld. CIT(A) under identical circumstances. Since the assessment in the instant case has ultimately been completed u/s 143(3) of the Act on the basis of various details filed by the assessee before the AO, therefore, considering the totality of the facts of the case and relying on the decision of the Tribunal in the case of Smt. Neetu Nayyar vs. ACIT (supra) and Smt. Meena Nayyer vs. ACIT (supra) I am of the considered opinion that it is not a fit case for levy of penalty u/s 271(1)(b) of the Act. I, therefore, set aside the order of the Ld. CIT(A) and direct the AO to cancel the penalty so levied by h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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