2013 (11) TMI 1518 - AT - Income Tax

Penalty u/s 271(1)(b) - assessee's failure to comply with the notice under section 142(1) - Held that - it is evident that the notice had three paragraphs. In the printed pro forma of the notice, there is instruction to the Officer to strike out items not applicable . However, none of the paragraphs has been stroked out. Sub-para (c) where the date and place of hearing is mentioned reads as furnish in writing and verified in the prescribed manner information called for as per annexures and on the points or matters specified therein before me at my office at Room Nf.G-301, D-Block, Vikas Bhawan on November 3, 2010 at 11.30 AM . A statement has been made by learned counsel at the bar that along with the said notice, there was no annexure specifying the points or matters on which the assessee was supposed to file the explanation. On these facts, in our opinion, the notice is a vague notice and, when no specific information was called, what compliance is expected from the assessee is not mentioned, then if the assessee had not appeared on the date of hearing, it cannot be said that the assessee committed a default liable for penalty under section 271(1)(b). - it is not a fit case for levy of penalty under section 271(1)(b) of the Act. - Decided in favour of assessee.

Summary

Issues Involved:
Levy of penalty under section 271(1)(b) of the Income-tax Act, 1961 for non-compliance with notice under section 142(1) for the assessment year 2008-09.

Analysis:

Issue 1: Levy of Penalty under Section 271(1)(b)
The appeals by the assessee were directed against the order of the Commissioner of Income-tax (Appeals) for the assessment year 2008-09, specifically challenging the levy of penalty under section 271(1)(b) of the Income-tax Act, 1961 amounting to Rs. 10,000. The Assessing Officer had imposed four penalties of Rs. 10,000 each under section 271(1)(b) for the assessee's failure to comply with the notice issued under section 142(1). The Tribunal discussed the facts related to one of the appeals, highlighting that the notice issued was vague and did not specify the information required from the assessee, making it unclear what compliance was expected. The Tribunal noted that since no specific information was called for in the notice, it could not be said that the assessee committed a default liable for penalty under section 271(1)(b). Therefore, the Tribunal concluded that it was not a suitable case for the levy of penalty under the said section and subsequently canceled the penalty.

Issue 2: Identical Penalties in Other Appeals
The Tribunal observed that the facts concerning the penalties challenged in other appeals were identical to the one discussed, and hence, the Tribunal decided to cancel those penalties as well. The Tribunal allowed the appeals of the assessee, leading to the cancellation of all penalties imposed under section 271(1)(b) for non-compliance with the notice under section 142(1) for the assessment year 2008-09.

In conclusion, the Appellate Tribunal, ITAT Delhi, in the cited judgment, analyzed the levy of penalties under section 271(1)(b) of the Income-tax Act, 1961 for non-compliance with notices under section 142(1) for the assessment year 2008-09. The Tribunal found the notices to be vague and lacking specificity regarding the required information from the assessee, leading to the cancellation of all penalties imposed by the Assessing Officer. The Tribunal's decision highlighted the importance of clear and specific communication in compliance matters to justify penalty imposition under the Income-tax Act.