Case Law Details
Pareshbhai Harshadbhai Gohel Vs DCIT (ITAT Surat)
ITAT Surat held that penalty under section 271(1)(b) of the Income Tax Act not leviable merely because the assesse couldn’t make compliance due to some bonafide reasons.
Facts- AO initiated and levied penalty u/s. 271(1)(b) of Rs. 10,000/- vide his order dated 20/01/2021. AO while passing the penalty order u/s. 271(1)(b) recorded that the assessee failed to comply notice under Section 142(1) dated 03/12/2020 for A.Y. 2012-13. AO issued notice u/s. 274 r.w.s. 271(1)(b) of the Act dated 08/01/2021 asking the assessee as to why penalty be not levied for non-compliance of notices u/s. 142(1) of the Act. AO recorded that no reply was filed by assessee. AO levied penalty of Rs. 10,000/-, for non-compliance of notice dated 03/12/2020 u/s. 142(1) of the Act.
Feeling aggrieved by the order of Assessing Officer, in levying penalty, the assessee filed appeal before the ld. CIT(A). However, ld. CIT(A) confirmed the same. Being aggrieved, the present appeal is filed by the assessee.
Conclusion- Held that where assessee had not complied with notice under Section 142(1) but assessment order was passed under Section 143(3) and not under Section 144, that meant that subsequent compliance in the assessment proceedings was considered as a good compliance and defaults committed earlier were ignored by Assessing Officer and, therefore, penalty under Section 271(1)(b) was not justified. I further find that similar view was followed in a series of decisions as has been relied by the ld. AR for the assessee in his submission. Thus, considering the fact that assessment in the present case was completed under Section 153A/143(3) in accepting return of income, I find that it was sufficient compliance, merely because the assessee could not make compliance due to some bonafide reason, no penalty under Section 271(1)(b) of the Act could be levied on the assessee.
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