2013 (4) TMI 179 - AT - Income Tax

Penalty u/s.271(1)(b) - search and seizure action u/s.132 - non-compliance by filing the details on 20.10.2009 - Held that - So far as the assessment orders in all respect of these assessees are concerned, there is not a single whisper by the A.O. that there was default on the part of the assessees to make compliance of any notices issued u/s.142(1) or 143(2) other than notice dt 14.10.09. In fact, on the perusal of the assessment order, it is found that the assessee s Chartered Accountant who was authorised to represent the assessee attended the assessment proceedings from time to time and filed the details called for by the A.O. The A.O. has also discussed the explanation filed by the assessee s in respect of certain transactions and has finally passed the assessment orders u/s.143(3) r.w.s. 153A. Thus it is interesting to note that in some of the assessment years the returns of income filed by these assessees have been accepted. In fact, on the careful perusal of the assessment order it is seen that nowhere any grievance is raised by the A.O. that the assessees or their Chartered Accountant were non-cooperative or made any conscious defiance of noting dt. 14.10.09. Thus in fact, it is seen that the assessee s responded on all the dates as required by the A.O. Merely because on 20.10.2009 the Chartered Accountant of these assessees has not appeared or filed some details as asked by the A.O., the extreme step is taken to penalise these assessees by levying the penalty u/s.271(1)(b). As in Hindustan Steel Ltd. vs State of Orissa 1969 (8) TMI 31 - SUPREME COURT wherein held that penalty will not ordinarily be imposed unless the party obliged, either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. In the present cases, nowhere it is alleged that the conduct of the assessees or their Chartered Accountant in the proceedings was deliberate defiance of law on their part, thus no justification on the part of the A.O. to levy penalty on all these assessees for the non-compliance by filing the details on 20.10.2009 - in favour of assessee.

Summary

Issues involved:
- Confirmation of penalty order passed under section 271(1)(b) by the Ld. CIT(A)
- Compliance with notices under various sections of the Income-tax Act
- Justification for levy of penalty for non-compliance with a notice
- Interpretation of Section 271(1)(b) regarding failure to comply with a notice

Detailed Analysis:
1. The appeal was against the order passed by Ld. CIT(A) confirming the penalty order under section 271(1)(b) for the assessment year 2007-08. The grounds of appeal raised by the assessee questioned the confirmation of the penalty, claiming no default was committed under the provision of section 271(1)(b). Additionally, it was argued that the penalty was confirmed even when there were good and sufficient reasons for the default.

2. The appellant's representative argued that penalties for earlier years had been deleted by the Tribunal, emphasizing that the facts and circumstances were the same. Reference was made to previous Tribunal orders where penalties for various assessment years were deleted, indicating a consistent approach by the Tribunal.

3. The Tribunal observed that the penalties were imposed for failure to comply with a notice to attend a hearing on a specific date. The Assessing Officer (A.O.) had levied penalties of Rs.10,000 per assessment year for non-compliance. The A.O. justified the penalties based on the failure of the assessee's Chartered Accountant to provide requested details, leading to the initiation of penalty proceedings under section 271(1)(b).

4. The Tribunal analyzed the assessment orders and noted that there was no indication of default by the assessees in complying with notices under sections 142(1) or 143(2) of the Act, except for the specific instance mentioned. It was highlighted that the Chartered Accountant had attended assessment proceedings and provided details as required by the A.O. The Tribunal referenced the principle established by the Hon'ble Supreme Court regarding the imposition of penalties for statutory obligations, emphasizing that penalties should not be imposed without just cause.

5. Considering the lack of deliberate defiance of the law by the assessees or their representative, the Tribunal concluded that there was no justification for the A.O. to levy penalties for non-compliance with the notice. Therefore, the Tribunal allowed the appeals and deleted all penalties imposed under section 271(1)(b) for the respective assessment years.

6. The Tribunal, after hearing arguments from both parties and noting the consistency in facts and circumstances across assessment years, decided to delete the impugned penalties. The appeal filed by the assessee was allowed, resulting in the cancellation of the penalties imposed under section 271(1)(b).

This detailed analysis provides a comprehensive overview of the issues involved in the legal judgment, the arguments presented, and the Tribunal's reasoning leading to the decision to delete the penalties imposed under section 271(1)(b).