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2015 (3) TMI 1384 - AT - Income TaxPenalty u/s 271(1)(b) - assessee has not complied with the notices under sections 143(2)/142(1) - HELD THAT - As decided in SARDARMAL KOTHARI 2013 (3) TMI 815 - ITAT CHENNAI when an assessment has been made under sec.143(3) and not under sec.144 of the I.T. Act, it means that subsequent compliance in the assessment proceedings was considered as good compliance and the defaults committed earlier were ignored by the Assessing Officer and, therefore, there is no case for levy of penalty under sec.271(1)(b) of the Act - Appeal of the assessee is allowed.
Issues:
Appeal against penalty under section 271(1)(b) of the Income Tax Act for non-compliance with notices under sections 143(2)/142(1). Detailed Analysis: 1. The appeal was filed against the CIT(A)'s order confirming a penalty of Rs. 50,000 imposed by the AO for non-compliance with notices under sections 143(2)/142(1) of the Income Tax Act for the assessment year 2007-08. 2. The AO observed that the assessee did not comply with the notices, leading to the penalty imposition under section 271(1)(b) of the Act. The AO relied on a precedent to justify the penalty, emphasizing the importance of complying with statutory notices. 3. The CIT(A) upheld the AO's decision. The assessee argued that they had complied with most notices and cited a Delhi Tribunal case where subsequent compliance was considered good compliance, leading to penalty deletion. 4. The Tribunal noted a similar case where penalty was deleted due to subsequent compliance with assessment proceedings after non-compliance with initial notices. The Tribunal, following this precedent, deleted the penalty of Rs. 50,000 imposed on the assessee. This judgment highlights the significance of complying with statutory notices under the Income Tax Act and the subsequent impact on penalty imposition. The Tribunal's decision underscores the importance of subsequent compliance in assessment proceedings and how it can mitigate penalties for earlier non-compliance with notices.
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