2018 (1) TMI 1695 - AT - Income Tax

Levying penalty u/s.271(1)(b) - non-compliance of the 'notice u/s.142(1) - assessment orders in the present case have been framed u/s.143(3) r.w.s.153A - HELD THAT - From the penalty order, we observe that the penalty has been imposed on account of non-compliance of the 'notice u/s.142(1) and assessment orders have been framed subsequently on 29.12.2014. We are of the view that undisputedly, the assessee is having health issues and residing about 60 to 70 kms away from Surat. The all assessment orders have been framed in presence of assessee's representative u/s.143(3) r.w.s. 153A of the and merely because the assessee could not comply with the notice for single hearing due to bonafide reasons as noted above, the penalty u/s. 27(1)(b) cannot be imposed on the assessee for such bonafide default due the reasons beyond his control. Therefore, we reached to conclusion that the Assessing Officer was not right incorrectly confirmed by the ld. CIT(A) Hence, we direct the AO to delete the impugned penalty. Accordingly, the grounds of the assessee in all the appeals are allowed.

Summary

Issues:
Appeal against penalty imposed under section 271(1)(b) of the Income Tax Act, 1961 for assessment years 2007-08 to 2013-14.

Analysis:
The appeal was filed against the penalty imposed by the Assessing Officer under section 271(1)(b) of the Income Tax Act, 1961 for various assessment years. The main ground raised by the assessee was that the penalty was unjustified considering the circumstances. The assessee's representative argued that the penalty was confirmed erroneously as the assessee, a heart patient recently treated for a heart attack, faced health issues preventing compliance with notices. Medical records were presented to support this claim. Additionally, it was highlighted that the distance from the assessee's residence to the relevant place was substantial, further hindering compliance. The representative also mentioned ongoing proceedings before the Income Settlement Commission, indicating efforts to resolve issues. Reference was made to previous orders to support the argument that compliance during assessment proceedings should be considered good compliance, and past defaults should be overlooked.

The Senior Departmental Representative supported the penalty, arguing that non-compliance was deliberate, justifying the Assessing Officer's decision. However, upon careful consideration, the Tribunal noted that assessment orders were made in the presence of the assessee's representative under section 143(3) read with section 153A of the Act. It was observed that the penalty was imposed for non-compliance with a notice dated 25.09.2014, despite assessment orders being subsequently framed. The Tribunal acknowledged the health issues faced by the assessee and the distance from the place of residence to the relevant location. Given that the assessment orders were made in the presence of the representative and the non-compliance was due to genuine reasons beyond the assessee's control, the Tribunal concluded that the penalty was unjustified. Consequently, the Tribunal directed the Assessing Officer to delete the penalty, allowing the grounds of the assessee in all the appeals.

In conclusion, the Tribunal allowed all the appeals of the assessee, emphasizing that the penalty imposed under section 271(1)(b) of the Income Tax Act, 1961 for the mentioned assessment years should be deleted. The decision was based on the genuine health issues faced by the assessee and the circumstances leading to non-compliance with the notice, which were deemed beyond the assessee's control. The Tribunal's ruling focused on the principle of fair treatment and consideration of individual circumstances in tax penalty cases.