Tribunal overturns penalties for non-compliance with notices, citing good compliance during assessment.

The tribunal allowed all four appeals against penalties imposed under section 271(1)(b) of the Income Tax Act, 1961 for non-compliance with statutory notices. Despite penalties being initially imposed, subsequent compliance during assessment proceedings under section 143(3) was deemed as good compliance, following a precedent set by a Co-ordinate Bench of the Tribunal in a similar case. As no contrary order was presented, the tribunal set aside the penalties and directed their deletion by the Assessing Officer.

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Issues:
Appeals against penalty u/s. 271(1)(b) of the Income Tax Act, 1961 - Compliance with statutory notices - Assessment orders u/s. 143(3) - Justification of penalty imposition.

Analysis:
The judgment pertains to four appeals filed against the imposition of penalties u/s. 271(1)(b) of the Income Tax Act, 1961 by the Learned Commissioner of Income Tax (Appeals) {CIT(A)}. The penalties were imposed due to non-compliance with statutory notices issued under the Act. The appellants argued that subsequent compliance during assessment proceedings, conducted under section 143(3) of the Act, should be considered as good compliance, leading to the condonation of earlier defaults. They relied on a precedent set by ITAT Delhi Bench in a similar case. The Authorized Representative contended that the penalties should be deleted based on this argument.

The Senior Departmental Representative supported the penalty imposition, stating that the assessees failed to provide a reasonable cause for non-compliance with statutory notices. The Department argued against taking a hyper-technical view and asserted that passing assessment orders under section 143(3) did not negate earlier defaults.

Upon reviewing the submissions and lower authorities' orders, the tribunal noted that although penalties were imposed for non-compliance with statutory notices, assessment orders were passed under section 143(3) of the Act. The tribunal observed that subsequent compliance did not absolve the assessees of earlier defaults, as highlighted by the CIT(A) in the dismissed appeals. However, the tribunal referenced a precedent set by a Co-ordinate Bench of the Tribunal in a similar case, where subsequent compliance in assessment proceedings was deemed as good compliance, leading to the ignoring of earlier defaults. As the facts in the current appeals mirrored the precedent case, and no contrary order was presented by the Department, the tribunal set aside the penalties in all four appeals and directed the Assessing Officer to delete them.

In conclusion, the tribunal allowed all four appeals, citing the precedent and directing the deletion of the penalties imposed on the assessees for non-compliance with statutory notices.

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