Tribunal overturns penalty for late compliance with tax notice, citing reasonable cause and legal precedents.

The Tribunal set aside the penalty imposed under section 271(1)(b) of the Income Tax Act for non-compliance with a notice, citing subsequent compliance in assessment proceedings as reasonable cause for earlier non-appearance. Relying on legal precedents, the Tribunal found the penalty unjustified and deleted it for the assessment years in question.

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Issues:
Assessment of penalty under section 271(1)(b) of the Income Tax Act, 1961 for non-compliance with notice u/s 142(1) dated 30.09.2015 for assessment years 2008-09 to 2014-15.

Analysis:
1. The appeals were filed by the assessee against the order of the Commissioner of Income tax (Appeals) confirming the penalty of Rs. 10,000/- levied under section 271(1)(b) of the Income-tax Act, 1961, for assessment years 2008-09 to 2014-15. The penalty arose from non-compliance with the notice u/s 142(1) dated 30.09.2015 for the hearing on 15.10.2015.

2. The AO issued notices to the assessee for non-compliance with the notice u/s 142(1) dated 30.09.2015, warning of a penalty of Rs. 10,000/-. Despite multiple opportunities, the assessee failed to provide the required information/documents. Consequently, the penalty was levied on 04.01.2016 for each assessment year from 2008-09 to 2014-15.

3. The CIT (A) upheld the penalty, noting the lack of compliance by the assessee on the specified date and the absence of any valid reasons or explanations for non-compliance. The CIT (A) found the case laws cited by the assessee contradictory and not supportive of their position, leading to the confirmation of the penalty.

4. The assessee appealed to the Tribunal, arguing that subsequent compliance with the assessment proceedings under section 143(3) should be considered as good compliance, rendering the earlier defaults irrelevant. The assessee relied on legal precedents such as Hindustan Steel Ltd. and presented cases like Hotel Blue Moon and Ashok Chaddha in support of their argument.

5. The Tribunal considered the submissions, noting that subsequent compliance was observed in the assessment under section 143(3). The Tribunal highlighted the presence of the assessee's counsel on 17.12.2015 and the filing of replies, indicating a reasonable cause for non-appearance on the earlier date. Citing the case of Akhil Bhartiya Prathmik Shikshak Sangh Bhawan Trust v. ADIT, the Tribunal concluded that the penalty under section 271(1)(b) was not justified and set aside the orders of the Revenue Authorities, thus deleting the penalty.

6. The Tribunal found that the subsequent compliance in the assessment proceedings constituted good compliance, and the defaults committed earlier were disregarded. Relying on legal precedents and the circumstances of the case, the Tribunal allowed the appeals of the assessee, leading to the deletion of the penalty under section 271(1)(b) for the assessment years in question.

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