Appellate Tribunal overturns penalty for non-compliance with notice under

The Appellate Tribunal allowed the assessee's appeal against the penalty imposed under section 271(1)(b) for non-compliance with a notice under section 143(2)/142(1). Citing a precedent, it was held that non-compliance is waived if the assessment order is passed under section 143(3) rather than section 144. As the assessment order in this case was under section 143(3), the penalty was deleted, overturning the decisions of the assessing officer and the Ld. CIT(A).

---

---

Issues involved: Appeal against penalty imposed u/s 271(1)(b) by Ld. CIT(A) for non-compliance with notice u/s 143(2)/142(1).

Summary:
The assessee appealed against the penalty imposed by the assessing officer u/s 271(1)(b), which was upheld by the Ld. CIT(A). The assessing officer initiated penalty proceedings due to non-compliance with a notice u/s 143(2)/142(1). The penalty of Rs. 10,000/- u/s 271(1)(b) was levied, and this decision was affirmed by the Ld. CIT(A). The assessee, being aggrieved, appealed before the Appellate Tribunal.

During the hearing, the assessee's counsel referred to a previous Tribunal order in the case of Kamdhenu Motors Pvt. Ltd vs. ACIT, where it was held that non-compliance is deemed waived if the assessment order is passed u/s 143(3) and not u/s 144. As the assessment order in the present case was passed u/s 143(3), following the precedent, the penalty imposed by the assessing officer and upheld by the Ld. CIT(A) u/s 271(1)(b) was deleted.

Therefore, the Appellate Tribunal allowed the assessee's appeal, and the order was pronounced in open court on the mentioned date.

---