2014 (2) TMI 1311 - AT - Income Tax

Penalty u/s 271(1)(b) - default of noncompliance during assessment proceedings - Held that - Assessing Officer himself in the assessment proceedings has recorded the finding that Shri Kailash Jogani, CA and Shri Nitesh Aggarwal, CA, authorized representatives attended the assessment proceedings in compliance to notice issued under Section 142(1) and 143(2). He completed the assessment at the income returned by the assessee i.e. ₹ 1,80,290/-. In view of the above factual finding in the assessment order, we are of the opinion that the assessee cannot be said to have committed the default of noncompliance during assessment proceedings which may saddle with the liability of penalty under Section 271(1)(b). Accordingly, the penalty levied under Section 271(1)(b) for the all the years under consideration is cancelled. - Decided in favour of assessee.

Summary

Issues:
- Appeal against imposition of penalty under Section 271(1)(b) of the Income-tax Act, 1961.

Analysis:
The judgment by the Appellate Tribunal ITAT Delhi involved appeals by the assessee challenging the order of the CIT(A) for the assessment years 2007-08 to 2010-11, specifically regarding the imposition of penalties under Section 271(1)(b) of the Income-tax Act, 1961. Despite the assessee not appearing for the hearing, the Tribunal proceeded ex parte. The Tribunal considered the identical facts across the years and focused on the penalty order related to the assessment year 2007-08. The penalty was imposed for the alleged failure to comply with notices issued under Section 142(1). However, the assessment order indicated that the authorized representatives of the assessee had attended the assessment proceedings in compliance with the notices under Sections 142(1) and 143(2), providing information as required. The Tribunal noted that the Assessing Officer himself acknowledged the compliance by the authorized representatives during the assessment proceedings. Based on this factual finding, the Tribunal concluded that the assessee did not commit any default in non-compliance during the assessment proceedings, leading to the cancellation of the penalties imposed under Section 271(1)(b) for all the relevant years.

The judgment emphasized the importance of factual findings in the assessment order, highlighting that the attendance of authorized representatives and the submission of necessary information during the assessment proceedings contradicted the basis for imposing penalties for non-compliance with notices under Section 142(1). By analyzing the specific details provided in the assessment order, the Tribunal determined that the assessee had fulfilled its obligations during the assessment process, rendering the penalties unjustified. Consequently, the Tribunal allowed all the appeals of the assessee, overturning the penalties imposed under Section 271(1)(b) for the respective years. The decision was pronounced in open court on 7th February 2014.