ITAT: Penalty shall not be levied merely on Technical Reasons

Judgement:-

The Income Tax Appellate Tribunal (ITAT), Delhi Bench deleted the penalty on account of alleged concealment of Income.

Facts of the case:-

The notices under section 153A of the Income Tax Act, 1961 were issued along with questionnaires were issued to the assessee, and the case was fixed for hearing show-cause notice of penalty under section 271(l)(b) was issued. In compliance with the said notice, the assessee filed a copy of the ITR and bank statement only. Another notice under section 142(1) was issued to the assessee for appearing with details enclosed with the notice. However, no compliance was made by the assessee even to the notice for all these assessment years.

Interpretation of law:-

The AO, therefore, issued a show-cause notice to the assessee asking him to explain as to why penalty under section 271(1)(b) of the Income Tax Act shall not be levied for all these assessment years. In absence of any compliance made by the assessee, a penalty under section 271(l)(b) was levied by AO. The assessee strongly challenged the order of the CIT(A) in confirming the levy of penalty under section 271(1)(b) of the Income Tax Act for all these years.

He submitted that the assessment in the instant case was ultimately completed under section 143(3) of the Act. Referring to various decisions filed in the synopsis the assessee submitted that it has been held in all these decisions that where the assessee has not made any compliance on certain dates but ultimately due compliance was made and replies filed by the assessee and had participated in the proceedings before the AO and the assessment has been completed under section 143(3) then the penalty should not be levied under section 271(1(b) of the Act for non-compliance of particular notice merely on technical grounds.

Conclusion:-

The coram of R.K.Panda held that it is not a fit case for levy of penalty under section 271(1)(b) of the Act. The Tribunal, therefore, set aside the order of the CIT(A) and directed the AO to cancel the penalty so levied by him for all the 6 years.

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