2018 (2) TMI 1626 - AT - Income Tax

Levy of penalty u/s 271(1)(b) - assessment order has been passed u/s 143(3) and not under not u/s 144 - Held that - As such, the compliance by the assessee to the notices issued to him stands accepted. This compliance could not be made initially for reasons beyond the control of the assessee, as stated. The assessee is an ex-army personnel. During the year, he was working with the Security Services Organization and was also getting pension from the Army. The assessee s daughter is an advocate. There was a matrimonial dispute. The assessee s daughter was granted divorce by the Competent Court. In these circumstances, that the compliance to the notices could not initially be made. The assessee was, thus, prevented by reasonable and sufficient cause. In Akhil Bhartiya Prathmik Shmshak Sangh Bhawan Trust vs. ADIT (2007 (8) TMI 386 - ITAT DELHI-G) and Parmeshwari Textiles vs. ITO 2004 (6) TMI 305 - ITAT JODHPUR amongst other cases, under similar circumstances, penalties have been deleted. - Decided in favour of assessee.

Summary

Issues:
Appeal against confirmation of penalty u/s 271(1)(b) of the IT Act for assessment year 2009-10.

Analysis:
The assessee appealed against the levy of penalty u/s 271(1)(b) of the IT Act for the assessment year 2009-10, arguing that compliance was made to the notices issued, as evident from the assessment order passed u/s 143(3) of the IT Act. The contention was that since the assessment was framed under section 143(3) and not section 144, there was no failure on the part of the assessee. The ld. DR, on the other hand, supported the impugned order.

Upon hearing both parties and examining the material on record, it was noted that the assessment order dated 14.12.2011 was passed under section 143(3) of the IT Act, indicating acceptance of compliance by the assessee to the notices issued. The delay in compliance was attributed to circumstances beyond the assessee's control, such as being an ex-army personnel with additional responsibilities and a family dispute involving his daughter's divorce, which hindered the initial response to the notices.

Citing precedents like 'Akhil Bhartiya Prathmik Shmshak Sangh Bhawan Trust vs. ADIT' and 'Parmeshwari Textiles vs. ITO,' where penalties were deleted under similar circumstances, the Tribunal found merit in the assessee's case. Consequently, the penalty imposed on the assessee was deleted, and the appeal was allowed. The order was pronounced in the open court on 21/12/2017.