Case Law Details
Siddarthini Nanda Vs ACIT (ITAT Cuttack)
A perusal of the show cause notice as also the satisfaction recorded by the AO in the assessment order, clearly does not mention the specific notice issued u/s.142(1) of the Act in respect of which non-compliance the penalty has been initiated. A perusal of the assessment order in all the cases shows multiple notices have been issued u/s.142(1) of the Act. This being so, we are of the view that the show cause notice and the satisfaction recorded by the AO in all the cases under consideration is vague. Thus, the order passed by the AO levying penalty u/s.271(1)(b) of the Act and confirming the same by the ld. CIT(A) is not sustainable in the case of both the assessees and the same stand cancelled.
FULL TEXT OF THE ORDER OF ITAT CUTTACK
These are the appeals filed by the two different assessees against the separate orders of the ld. CIT(A)-2, Bhubaneswar, all dated 28.10.2022 for the assessment years 2010-2011 & 2011-2012, thereby confirming the penalty levied u/s.271(1)(b) of the Act.
2. Shri S.K.Sarangi, CA assisted by Intern Ms. Sugyanee Kuanr appeared for both the assessees. Shri S.C.Mohanty, Sr. DR assisted by Intern Mr. Dharmashoka Panda, appeared for the revenue.
3. It was submitted by the ld. AR that there was a search on the premises of the assessee on 09.12.2015. The assessee had filed writ petitions before the Hon’ble Jurisdictional High Court and the Hon’ble High Court was pleased to direct that the proceedings to be continued in respect of assessment but the final order should not be passed till the disposal of the Writ Petition before the Hon’ble High Court. It was the submission that the assessee was under the impression that the assessee had obtained a complete stay and, therefore, the assessee had not cooperated the assessment proceedings. It was further submission that the show cause notice issued by the AO and in the satisfaction recorded by the AO in the assessment order for the purpose of initiating the penalty u/s.271(1)(b) of the Act, the AO has not mentioned on the basis of failure of compliance for which notice, the penalty has been initiated. It was, thus, the prayer that as the notice has not been specifically identified the show cause notice as also the satisfaction recorded by the AO is general in nature, the penalty as levied by the AO and as confirmed by the ld. CIT(A) is liable to be deleted.
4. In reply, ld.Sr. DR submitted that the penalty has been levied for the violation to comply with the notice issued on 31.01.2019 as has been mentioned in the penalty order. It was the submission that it is not necessary for the AO to specify each and every violation. It was submitted that the assessee having not complied with the notices issued u/s.142(1) of the Act, the AO was well within his power to levy the penalty. It was also submitted by the ld. Sr. DR that the Hon’ble Jurisdictional High Court ITA Nos.188-191/CTK/2022 has not granted complete stay and the interim order did not preclude the AO from completing the assessment. It only precludes the AO from passing the assessment order till disposal of Writ Petition. It was the submission that the assessment orders in the instant cases of both the assessees have been passed only after the writ petition have been disposed off. It was, thus, submitted that the penalty as levied by the AO and as confirmed by the ld. CIT(A) is liable to be upheld.
5. We have considered the rival submissions. A perusal of the show cause notice as also the satisfaction recorded by the AO in the assessment order, clearly does not mention the specific notice issued u/s.142(1) of the Act in respect of which non-compliance the penalty has been initiated. A perusal of the assessment order in all the cases shows multiple notices have been issued u/s.142(1) of the Act. This being so, we are of the view that the show cause notice and the satisfaction recorded by the AO in all the cases under consideration is vague. Thus, the order passed by the AO levying penalty u/s.271(1)(b) of the Act and confirming the same by the ld. CIT(A) is not sustainable in the case of both the assessees and the same stand cancelled.
6. In the result, appeals of both the assessees are allowed.
Order dictated and pronounced in the open court on 08/02/2023.
