Tribunal cancels penalty under IT Act for 2009-10 due to reasonable cause

The penalty imposed on the assessee under section 271(1)(b) of the IT Act for the assessment year 2009-10 was deleted by the Tribunal. The Tribunal considered the assessee's compliance with notices issued, as demonstrated by the assessment order passed under section 143(3) of the IT Act. The delay in compliance was attributed to circumstances beyond the assessee's control, leading to the conclusion that there was no failure on the part of the assessee. Relying on relevant precedents, the Tribunal allowed the appeal, finding merit in the assessee's case.

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Issues:
Appeal against confirmation of penalty u/s 271(1)(b) of the IT Act for assessment year 2009-10.

Analysis:
The assessee appealed against the levy of penalty u/s 271(1)(b) of the IT Act for the assessment year 2009-10, arguing that compliance was made to the notices issued, as evident from the assessment order passed u/s 143(3) of the IT Act. The contention was that since the assessment was framed under section 143(3) and not section 144, there was no failure on the part of the assessee. The ld. DR, on the other hand, supported the impugned order.

Upon hearing both parties and examining the material on record, it was noted that the assessment order dated 14.12.2011 was passed under section 143(3) of the IT Act, indicating acceptance of compliance by the assessee to the notices issued. The delay in compliance was attributed to circumstances beyond the assessee's control, such as being an ex-army personnel with additional responsibilities and a family dispute involving his daughter's divorce, which hindered the initial response to the notices.

Citing precedents like 'Akhil Bhartiya Prathmik Shmshak Sangh Bhawan Trust vs. ADIT' and 'Parmeshwari Textiles vs. ITO,' where penalties were deleted under similar circumstances, the Tribunal found merit in the assessee's case. Consequently, the penalty imposed on the assessee was deleted, and the appeal was allowed. The order was pronounced in the open court on 21/12/2017.

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