2019 (3) TMI 635 - AT - Income Tax

Levy of penalty u/s 271F and u/s 271(1)(b) - noncompliance of a notice u/s 153A - HELD THAT - The non-obstante clause contained in section 153A of the Act, applies to the provisions of section 153A of the Act only. It does not extend to the provisions of section 271F of the Act. No matter that noncompliance of a notice u/s 153A of the Act has not been subjected to penalty under any specific provision of the Act. Section 271F of the Act provides for penalty in cases where no return is filed as per the requirements of section 139(1) of the Act or the provisos thereto. Penalty u/s 271F of the Act pertains only to infringement of section 139(1) and its provisos, and not to that of a notice u/s 153A of the Act. So far as, the penalty concerning u/s 271(1)(b) it is held that the assessment was completed as a regular assessment u/s 143(3) of the Act therefore, the default, if any, was not considered to be willful on the part of the assessee. - Decided in favour of assessee.

Summary

Issues involved: Appeals against confirmation of penalty under sections 271F and 271(1)(b) of the Income-tax Act, 1961.

Analysis:

1. Penalty under section 271F: The ITAT Lucknow considered appeals against the confirmation of penalty under section 271F of the Income-tax Act, 1961. The decision referenced a previous case, "Sunil Kumar Jaiswal vs. Dy. CIT, Kanpur," where it was held that the non-obstante clause in section 153A of the Act applies only to section 153A and not to section 271F. It was clarified that non-compliance with a notice under section 153A does not attract penalty under section 271F. Section 271F deals with penalties for failure to file a return as per section 139(1) requirements, and it was emphasized that this penalty pertains specifically to section 139(1) infringements and not to notice under section 153A.

2. Penalty under section 271(1)(b): The judgment also addressed an appeal against the confirmation of penalty under section 271(1)(b) of the Act. In the case of ITA No.425/Lkw/2017, it was noted that the assessment was completed as a regular assessment under section 143(3) of the Act. Consequently, any default was not deemed willful on the part of the assessee, leading to the cancellation of the penalty.

3. Decision: Based on the above analysis, the ITAT Lucknow concluded that the penalties in question were not sustainable and subsequently canceled them. The appeals of the assessee were allowed as a result of this decision. The order was pronounced in open court on 28/02/2019.