2012 (12) TMI 1099 - AT - Income Tax

Tribunal deletes penalty under Income Tax Act citing lack of deliberate non-compliance

The Tribunal allowed the appeal, setting aside the CIT(A)'s order and deleting the penalty under section 271(1)(b) of the Income Tax Act, 1961. The ... - Issues involved: Levy of penalty u/s 271(1)(b) of the Income tax Act, 1961 for non-compliance of statutory notice.Summary:Issue 1: Compliance of statutory noticeThe appeal was against the order of CIT(A) for the assessment year 2005-06 concerning the levy of penalty u/s 271(1)(b) for non-compliance of statutory notice. The AO requested the assessee to produce certain details on 20.10.2009, but there was no compliance. Subsequent letters were sent by the AO, and the penalty of Rs. 10,000 was levied when there was no response from the assessee. The assessee argued that compliance was eventually done, and there was no deliberate non-compliance. CIT(A) upheld the penalty, but the Tribunal, considering similar cases, deleted the penalty citing lack of deliberate defiance of law by the assessee.The Tribunal observed that after the initial non-compliance, the AO allowed further time for compliance, and the assessee eventually provided the required details. Citing the judgment in Hindustan Steel Ltd. vs. State of Orissa, the Tribunal emphasized that penalties should not be imposed unless there is deliberate defiance of law. As similar penalties in other assessment years were deleted for the same default, the Tribunal concluded that there was no deliberate non-compliance by the assessee. Therefore, the penalty u/s 271(1)(b) was deleted based on the precedent set in the assessee's own case in previous orders.In conclusion, the Tribunal allowed the appeal of the assessee, setting aside the order of the CIT(A) and deleting the penalty.