2017 (9) TMI 533 - AT - Income Tax

Levy of penalty under section 271(1)(b) - non compliance with notices issues under section 143(2)/142(1) - eligible reasons for default - Held that - Smt. Abha Gupta, daughter-in-law of the Principal Officer of the assessee company namely Mr. Satya Prakash Gupta has to be hospitalized on 11th January, 2013. Further, Mr. Satya Prakash Gupta, Principal Officer of the assessee company had to be hospitalized due to heart-attack and therefore, there were noncompliance of the said notices. As assessee has disclosed the reasonable cause for failure to comply with the statutory notice penalty deleted. Appeals of the assessee are allowed.

Summary

Issues:
Challenging the levy of penalty under section 271(1)(b) of the I.T. Act, 1961 for the A.Y. 2009-2010.

Analysis:
1. The first issue pertains to ITA.No.6404/Del./2014 (A.Y. 2009-2010) where the Ld. CIT(A) noted non-compliance with statutory notices by the assessee and subsequent penalty imposition by the Assessing Officer. The assessee cited hospitalization of family members as reasons for non-attendance at proceedings. The Ld. CIT(A) acknowledged procedural deficiencies but upheld the penalty for the relevant assessment year while deleting penalties for other years due to the harshness of the penalty.

2. Moving on to ITA.No.6403/Del./2014 (A.Y. 2009-2010), similar facts were observed with penalty imposed for non-compliance with statutory notices. The assessee again cited family health issues as reasons for non-attendance. The Ld. CIT(A) confirmed the penalty for the assessment year in question but deleted penalties for subsequent years based on similar reasoning as the previous case.

3. The final issue involved a comparison of the assessee's explanations for non-compliance with statutory notices in both cases. The assessee's counsel argued that the Ld. CIT(A) had accepted the explanations in similar cases leading to the cancellation of penalties for multiple years. The Tribunal also cited precedents where penalties were canceled based on reasonable causes for non-compliance. The Tribunal found the assessee's reasons satisfactory and canceled the penalty for the relevant year, emphasizing consistency in decision-making.

In conclusion, the Tribunal set aside the Ld. CIT(A)'s orders and canceled the penalty for the assessed year, aligning with the consistent approach taken in similar cases. This comprehensive analysis highlights the legal nuances and precedents considered in reaching the final judgment.