2016 (6) TMI 1417 - AT - Income Tax

Penalty under Income Tax Act deleted by ITAT Ahmedabad due to assessee's cooperation during assessment

The Appellate Tribunal ITAT Ahmedabad heard an appeal regarding a penalty under section 271(1)(b) of the Income Tax Act, 1961 for the assessment year ... Penalty u/s 271(1)(b) - non-cooperative to the various scrutiny notices - HELD THAT:- There is no dispute about the facts narrated in the preceding paragraphs. The Assessing Officer as well as the CIT(A) for having committed default in responding to above stated scrutiny notices. We find from the lower appellate order that the assessee has duly explained its non appearance/adjournment applications. Assessing Officer completed assessment on basis thereof on 29-12-2010 assessing total loss at ₹ 1,80,60,440/- raising nil tax demand. This is not the Revenue’s case that the Assessing Officer had not framed a regular assessment u/s 143(3) of the Act on the basis of assessee’s documents placed on record. We conclude that the assessee’s act cannot be treated as to have non-cooperative to the various scrutiny notices. We delete the impugned section 271(1)(b) penalty. Assessee’s appeal is allowed. Issues: Assessment year 2008-09 - Penalty under section 271(1)(b) of the Income Tax Act, 1961Analysis:1. The appeal for the assessment year 2008-09 was related to the penalty imposed under section 271(1)(b) of the Income Tax Act, 1961. The penalty was partially confirmed by the CIT(A)-VIII, Ahmedabad, for not responding to various notices issued during the assessment proceedings.2. The assessee, a company, had filed its return declaring a total loss. The Assessing Officer initiated scrutiny and issued multiple notices under sections 143(2) and 142(1) along with questionnaires. The Assessing Officer observed that the assessee did not respond to these notices, leading to the imposition of a penalty.3. Both the Assessing Officer and the CIT(A) found the assessee to be in default for not responding to the scrutiny notices. However, the assessee provided explanations for its non-appearance and submitted necessary details during the assessment process. The assessment was completed based on the documents provided by the assessee, resulting in nil tax demand.4. The Tribunal concluded that the assessee's actions did not amount to non-cooperation with the scrutiny notices. As a result, the penalty under section 271(1)(b) was deleted, and the assessee's appeal was allowed.Judgment Summary:The Appellate Tribunal ITAT Ahmedabad heard the appeal for the assessment year 2008-09 regarding a penalty under section 271(1)(b) of the Income Tax Act, 1961. The assessee, a company, had filed its return showing a total loss, following which the Assessing Officer initiated scrutiny by issuing various notices. The Assessing Officer imposed a penalty for the assessee's failure to respond to the notices. However, the Tribunal found that the assessee had provided explanations for its non-appearance and had cooperated by submitting necessary details during the assessment process, resulting in nil tax demand. Therefore, the Tribunal concluded that the penalty was unjustified and deleted it, allowing the assessee's appeal.