When quantum additions deleted, penalty u/s 271(1)(b) not leviable for failure to comply with notices u/s 142(1). At best it could be technical & venial default on part of assessee
ABACUS Case Law Citation
ABCAUS 3383 (2020) (09) ITAT
Important case law relied upon by the parties:
CIT vs. Kabul Chawla [2016] 380 ITR 573 (Del)
In this case appeal was preferred by the Revenue against the orders of Commissioner of Income Tax (Appeals) in confirming the levy of penalty u/s 271(1)(b) of the Income Tax Act, 1961 (the Act) for failure to comply with notices issued u/s 142(1) at the assessment proceedings.
The Assessing Officer (AO) had passed the assessment orders ex-parte in absence of assessee under section 153A/144 of the Act and determined the income of assessee on estimate basis.
The assessee preferred appeals before the CIT(A) against the quantum additions made in ex-parte assessment orders and the CIT(A) deleted the entire additions holding that the additions are made in absence of any material found during the course of search under section 132 of the Act.
Before the Tribunal, the assessee submitted that since quantum addition have been deleted, therefore the penalty may be cancelled.
The Tribunal observed that since the CIT(A) had deleted the entire additions, therefore there may not be any default on the part of the assessee to comply with the statutory notices.
The Tribunal opined that it may now be a technical and venial default on the part of the assessee and as such, the penalty may not be leviable against the assessee under section 271(1)(b) of the Act. Considering the above facts in the light of explanation of
On the facts of the case, the Tribunal stated that since the additions on merit had already been deleted and no further appeals were pending therefore, there may not be a default on the part of the assessee and at best it could be considered as a technical default, for which, penalty should not be levied by the authorities below for failure to comply with the notices under section 142(1) of the Act.
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