Sumit Global Private Limited Vs DCIT (ITAT Raipur)
Section 271(1)(b) Penalty Unsustainable Without Deliberate Default; Delay Defeats Legislative Intent: ITAT Raipur
The Raipur ITAT allowed the assessee’s appeals for AYs 2012-13 and 2013-14, deleting penalties of ₹20,000 each levied under Section 271(1)(b) of the Income Tax Act for alleged non-compliance with notices issued under Section 142(1). The Tribunal first condoned a delay of 16 days in filing the appeals, holding that the assessee had shown sufficient cause and that substantial justice should prevail over technical considerations.
The assessee’s cases had been reopened under Section 148 following a search under Section 132 in the RKTC Group. During reassessment proceedings, notices under Section 142(1) were issued, but the Assessing Officer alleged non-compliance and completed the assessments under Section 144 read with Section 147. Penalty proceedings under Section 271(1)(b) were thereafter initiated, culminating in levy of penalties, which were upheld by the CIT(A).
Before the Tribunal, the assessee contended that it had not received alerts on the Director’s mobile number or personal email, had not regularly accessed the Income Tax Portal, and had never received notices by post or by hand. It was also argued that the penalty orders were passed long after initiation of penalty proceedings and that penalties under Section 271(1)(b) have no direct correlation with the quantum assessment proceedings.
