No Penalty u/s 271(1)(b) when as per assessment order, assessee appeared time to time and furnished documents

No Penalty u/s 271(1)(b) when as per the assessment order, the assessee appeared time to time and explained return, furnished documents as requisitioned and case was heard and discussed – ITAT

ABCAUS Case Law Citation:
ABCAUS 2578 (2018) (10) ITAT

Important Case Laws Cited/relied upon by the parties:

Globus Infocom Limited vs. DCIT

The appellant assessee(s) had challenged the orders passed by the Commissioner of Income Tax (Appeals), arising out of penalty orders passed by Assessing Officer u/s 271(1)(b) of the Income Tax Act, 1961 (Act).

During the course of assessment proceedings, the Assessing Officer issued statutory notices u/s 142(2) and 142(1) of the Act and duly served upon the assessee. In compliance with the said notices, Advocate, A/R of the assessee appeared from time to time to explain the return of income and other documents.

The assessee made compliance of various notices during the assessment proceedings and submitted the required details asked by the Assessing Officer and assessment was completed u/s 143(3) of the Act.

However, the Assessing Officer while making the assessment u/s 143(3) of the Act initiated penalty proceedings u/s 271(1)(b) r.w.s. 274 of the Act as according to the AO, the assessee had failed to appear on the several dates.

In reply to the penalty notice, the assessee stated that the notice was misplaced by his staff who totally forgotten about the said notice. 

The AO rejected the explanation of the assessee as not tenable. The AO was of the view that the assessee was clearly had an inclination for “non-compliance”. The AO noted that the assessee willfully evaded to appear and avoided production of documents as was asked for on different dates. Based on these facts the AO imposed penalty U/s 271(1) (b) of the Act to the tune of Rs. 10,000/- 

Aggrieved, the assessee carried the matter in appeal before the CIT(A) who confirmed the penalty u/s 271(1)(b) of the Act.

Before the Tribunal, it was submitted that the Assessing Officer had imposed penalty in an arbitrary manner despite the A/R of the assessee visited the office of the Assessing Officer on various dates of hearing, as evident from the order of the AO.

Attention of the Tribunal was drawn towards the assessment order wherein the Assessing Officer himself admitted that in compliance with the said notices the advocate and authorised representative of the assessee appeared from time to time to explain the return. It had been also mentioned that during the course of scrutiny proceedings, AR of the assessee furnished the documents and accounts as requisitioned and the case was heard and discussed.

The Tribunal observed that undisputed fact was that the assessment was completed u/s 143(3) of the Act, and the assessee made the compliance of all the statutory notices issued by the assessing officer, as evident from the assessment order.

The Tribunal noted that from the assessment order it was evidently clear that the Counsel for the assessee had appeared before the Assessing Officer from time to time and explained the return of income and the case was discussed with the Counsel of the assessee. During the assessment proceedings, the documents and details were also submitted on the various dates which were mentioned in the assessment order.

It was further noted that the Assessing Officer had not issued any further notices to the assessee to call for details, hence there was no any non-compliance of the statutory notices, therefore, penalty u/s 271(1)(b) of the Act should not be levied.

Therefore, the Tribunal opined that the various dates mentioned by the Assessing Officer in the penalty order, stating non-compliance of notices u/s 271(1)(b) of the Act were not emerging from the assessment order passed by the Assessing Officer u/s 143(3) of the Act.

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