2018 (5) TMI 2108 - AT - Income Tax

Penalty u/s 271(1)(b) - assessee has not complied with the notice fixing the date of hearing in assessment proceedings - assessee received notices under section 153A - HELD THAT - As per the case of a group company in Glenasia Commodities Pvt. Ltd 2017 (10) TMI 1596 - ITAT DELHI we are of the considered opinion that the plea taken by the assessee that because of the huge work involved in furnishing information in 12 cases for 6 years constitutes a proper and plausible explanation. Further we find that the ratio laid down in Akhil Bharatiya Prathmik Shikshack Sangh Bhawan trust s 2007 (8) TMI 386 - ITAT DELHI-G case squarely applies to the facts of this batch of cases. We therefore find that the penalty levied under section 271(1)(b) of the act cannot be sustained. We accordingly direct the Ld. AO to delete the same. - Decided in favour of assessee.

Summary

Issues:
Penalty under section 271(1)(b) of the Income Tax Act, 1961.

Analysis:
The appeals were filed challenging the penalty of Rs. 10,000 imposed under section 271(1)(b) of the Income Tax Act, 1961. The facts of the case involved a search and seizure operation at the business premises of a company and the residential premises of the directors. The assessees received notices under section 153A of the Act and were asked for information under 31 items. The assessees claimed they were cooperating but due to the volume of work, they were submitting information in phases. The penalty was imposed by the Assessing Officer, which was confirmed by the CIT(A) but restricted to 3 out of 7 years.

The authorized representative of the assessee argued that they were present at all hearings and were submitting information as it became available. They contended that since the assessment was completed under section 143(3) and not section 144 of the Act, no penalty should have been levied. The representative cited a similar case where the penalty was deleted by a coordinate bench of the Tribunal due to no wilful default or non-cooperative attitude. The Department, however, argued that the assessee did not comply with a hearing notice and thus deserved the penalty.

The Tribunal reviewed the case and referred to a similar case where the penalty was deleted due to the assessee's cooperation and the completion of assessment under section 143(3) of the Act. It was noted that the assessee had attended the proceedings and submitted all required details before the penalty notice was received. The Tribunal also found that the explanation provided by the assessee for certain assessment years was plausible, leading to the deletion of the penalty for those years. The Tribunal concluded that there was no willful default or non-cooperative attitude, thus directing the Assessing Officer to delete the penalty.

In another case with similar circumstances, the Tribunal followed a previous decision and deleted the penalty under section 271(1)(b) of the Act. The Tribunal found the explanation provided by the assessee regarding the volume of work involved in furnishing information to be reasonable. The Tribunal emphasized that the penalty could not be sustained based on the facts presented and directed the Assessing Officer to delete the penalty.

In conclusion, all the appeals were allowed, and the penalties under section 271(1)(b) of the Income Tax Act were directed to be deleted.