Case Law Details
Sardarmal Kothari Vs ACIT (ITAT Chennai)
ITAT held that when an assessment has been made under sec.143(3) and not under sec.144 of the I.T. Act, it means that subsequent compliance in the assessment proceedings was considered as good compliance and the defaults committed earlier were ignored by the Assessing Officer and, therefore, there is no case for levy of penalty under sec.271(1)(b) of the Act. In the present case, the assessee seems to have co-operated with the assessment proceedings by responding to the notices and filing information called for and the assessment was completed under sec.143(3) and not sec.144 of the Act. Therefore, we hold that there is no case for levy of penalty under sec.271(1)(b) of the I.T. Act the assessee’s case.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
This is an appeal filed by the assessee against the order of Commissioner of Income Tax (Appeals)-IX, Chennai, dated 30.8.2012 for the Asst. Year 2009-10. The only grievance of the assessee in this appeal is that the Commissioner of Income Tax (Appeals) erred in confirming the penalty of A.10,000/- levied by the Assessing Officer under sec.271(1)(b) of the I.T. Act.
2. The Assessing Officer levied penalty of A.10,000/- under sec.271(1)(b) of the Act as the assessee did not respond to notices issued by him under sec.143(2) & 142(1) of the I.T. Act on three occasions, ie., on 2.9.2010, 8.9.2011 and 15.10.2011, fixing the dates of hearing on 20.9.2010, 12.9.2011 and 20.10.2011 respectively. Subsequently, the assessment was made under sec.143(3) of the Act wherein the assessee appeared and furnished information called for by the Assessing Officer. The assessee preferred appeal before the Commissioner of Income Tax (Appeals) against levy of penalty contending that no Show Cause Notice has been issued by the Assessing Officer before levy of penalty under sec.271(1)(b) of the Act.
3. The assessee contended that he has cooperated with the Assessing Officer by responding to the notices issued there after and the assessment was completed under sec.143(3) of the Act and, therefore, since he has cooperated with the assessment proceedings complying with the notices subsequently issued and since the assessment was made under sec.143(3) of the Act and it was not an ex-parte assessment under sec.144 of the Act, the Assessing Officer should not have levied penalty under sec.271(1)(b) of the Act. He placed reliance on the decision of Delhi Bench of the ITAT in the case of Akhil Bhartiya Prathmik Shikshak Sangh Bhawan Trust v. Asst. Director of Income Tax (115 TTJ 419) and the decision of Ahmedabad Bench of the Tribunal in the case of Swarnaben M. Khanna & Others v. DCIT (132 TTJ 1). However, the Commissioner of Income Tax (Appeals) confirmed the penalty levied by the Assessing Officer on the ground that the assessee did not respond to the notices issued by the Assessing Officer.
4. The Counsel for the Assessee reiterates the submissions made before the Commissioner of Income Tax (Appeals) and submits that there is no justification in levying penalty, especially when the assessment was made under sec.143(3) of the Act and not under sec.144 of the I.T. Act.
5. Departmental Representative supported the orders of lower authorities.
6. We have heard both sides. Perused the materials on record and the orders of authorities below. We have gone through the decisions relied on by the Counsel for the Assessee. In both these decisions, the Tribunal held that when an assessment has been made under sec.143(3) and not under sec.144 of the I.T. Act, it means that subsequent compliance in the assessment proceedings was considered as good compliance and the defaults committed earlier were ignored by the Assessing Officer and, therefore, there is no case for levy of penalty under sec.271(1)(b) of the Act. In the present case, the assessee seems to have co-operated with the assessment proceedings by responding to the notices and filing information called for and the assessment was completed under sec.143(3) and not sec.144 of the Act. Therefore, we hold that there is no case for levy of penalty under sec.271(1)(b) of the I.T. Act the assessee’s case.
7. In the result, the appeal of the assessee is allowed.
8. Order pronounced on Friday, the 8th day of March 2013, at Chennai.
