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2016 (11) TMI 1556 - AT - Income TaxInitiation of penalty u/s 271(1)(b) for non-appearance on 30.10.2015 - Held that - assesses had reasonable cause for non- appearance on that day - therefore there is no justification for levying the u/s (271)(1) (b) - also no penalty can be levied if the assessments have been completed u/s 143 (3) - Decided in favor of assessee.
Issues:
Levy of penalty u/s 271 (1) (b) of the IT Act at ? 10,000 in each assessment year. Analysis: In this case, the appeals were filed against the orders of the CIT (A) confirming the penalty under section 271(1)(b) of the IT Act. The main contention was that the assesses had a reasonable cause for non-appearance on the specified date. The Assessing Officer had levied the penalty for non-appearance on a particular date, but the assesses' counsel had sought time to file the reply due to the large number of cases involved. The counsel appeared on subsequent dates and complied with the notices, providing valid reasons for the delay. The Tribunal found that the assesses had a reasonable cause for non-appearance and that no penalty should be levied under section 271(1)(b) in such circumstances. Moreover, the assessments had been completed under section 143(3) of the IT Act, and subsequent compliances in the assessment proceedings were considered as good compliances. The Tribunal referred to a previous case where it was held that if assessments were completed under section 143(3) and subsequent compliances were made, the defaults committed earlier should be ignored. Therefore, the levy of penalty under section 271(1)(b) was deemed unjustified. Citing the case of Akhil Bhartiya Parthmik Shmshak Sangh Bhawan Trust vs. ADIT (2008) 115 TTJ 419 (Del), the Tribunal set aside the orders of the Revenue Authorities and deleted the penalty in all appeals. Conclusively, the Tribunal allowed all the appeals of the assesses, ruling in favor of deleting the penalty under section 271(1)(b) of the IT Act. The decision was pronounced in the open court on 23/11/2016.
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