Penalty under Income Tax Act deemed unjustified for assessee for A.Y. 2014-15

The Tribunal found that the penalty u/s.271(1)(b) of the Income Tax Act, 1961 was unjustified for the assessee for A.Y. 2014-15. Despite initial confusion and absence, the assessee later cooperated, providing required details. As per relevant case laws, when assessments are completed u/s.143(3) after furnishing details, penalty u/s.271(1)(b) cannot be imposed. The Tribunal directed the ld. AO to delete the penalty, allowing the assessee's appeal.

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Issues:
Whether the levy of penalty u/s.271(1)(b) of the Income Tax Act, 1961 was justified in the case of the assessee for A.Y. 2014-15.

Analysis:
The appeal in ITA No.1971/Mum/2021 for A.Y.2014-15 was based on the order by the ld. Commissioner of Income Tax (Appeals) National Faceless Appeal Centre (NFAC) Delhi regarding the imposition of penalty u/s.271(1)(b) of the Income Tax Act, 1961. The main issue to be decided was whether the ld. CIT(A) was correct in confirming the penalty in the given circumstances.

The assessee, an individual, initially faced issues with her income tax matters due to confusion regarding who was handling them, her father or in-laws. Despite the initial absence before the ld. AO, the assessee later appeared in person and provided all required details. The assessment was completed u/s.143(3) of the Act, indicating condonation of the earlier absence by the ld. AO. Citing relevant case laws, it was established that when assessments are completed u/s.143(3) of the Act after furnishing details, penalty u/s.271(1)(b) cannot be imposed. The Tribunal concluded that this was not a suitable case for the penalty, directing the ld. AO to delete it, and consequently, the appeal of the assessee was allowed.

In summary, the Tribunal found that the initial absence of the assessee before the ld. AO was justified due to confusion, which was later resolved when the assessee appeared and provided the necessary details. Relying on relevant case laws, it was determined that the penalty u/s.271(1)(b) was unwarranted in this case, leading to the allowance of the assessee's appeal.

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