Tribunal Deletes Penalties, Emphasizes Compliance, Order on 27/09/2022

The Tribunal allowed all twelve appeals, deleting penalties under sections 271(1)(b) and 272A(1)(d). Penalties were not justified as subsequent compliance was satisfactory, and the assessment was not passed under section 144. The decision emphasizes that penalties should not be imposed when compliance is eventually met. The Tribunal's order was pronounced on 27/09/2022.

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Issues Involved:
1. Legitimacy of penalty levied under section 271(1)(b) of the Income Tax Act, 1961.
2. Compliance with notices issued under section 142(1) of the Act.
3. Impact of subsequent compliance on penalty imposition.
4. Applicability of penalty under section 272A(1)(d) of the Act.

Issue-wise Detailed Analysis:

1. Legitimacy of Penalty under Section 271(1)(b):
The primary issue revolves around whether the penalty levied under section 271(1)(b) for non-compliance with notices issued under section 142(1) was justified. The assessee argued that despite taking adjournments, they eventually submitted the required documents, which were acknowledged by the Assessing Officer (AO) in the assessment order. The Tribunal found merit in this argument, noting that the assessment order was passed under section 143(3) r.w.s. 153A, indicating that the AO considered the subsequent compliance satisfactory. Therefore, the Tribunal concluded that the penalty under section 271(1)(b) should not be levied when the assessment was not passed under section 144.

2. Compliance with Notices Issued under Section 142(1):
The Tribunal examined the compliance with notices dated 02.12.2020 and 16.12.2020. The assessee sought adjournments on both occasions, citing heavy workload and the Covid-19 pandemic. The Tribunal noted that the AO eventually received the necessary documents and details, which were used to frame the assessment order. The Tribunal agreed with the CIT(A) that the first notice's compliance was adequate as the adjournment request was timely. However, for the second notice, despite extensions, the compliance was delayed, justifying a partial penalty.

3. Impact of Subsequent Compliance on Penalty Imposition:
The Tribunal emphasized that when the assessment order is framed under section 143(3) r.w.s. 153A, it implies that the AO accepted the subsequent compliance as satisfactory. Citing the case of Akhil Bhartiya Prathmik Shikshak Sangh Bhawan Trust vs. ACIT, the Tribunal reiterated that penalties should not be imposed when the assessment is not passed under section 144, as it indicates that the AO did not consider the initial non-compliance willful.

4. Applicability of Penalty under Section 272A(1)(d):
For some appeals, penalties were levied under section 272A(1)(d), which is similar to section 271(1)(b). The Tribunal applied the same reasoning and deleted these penalties as well, emphasizing that the compliance eventually made by the assessee should not attract penalties.

Conclusion:
The Tribunal allowed all twelve appeals, deleting the penalties under sections 271(1)(b) and 272A(1)(d). The decision underscores that penalties for non-compliance should not be imposed when subsequent compliance is acknowledged and the assessment is not passed under section 144. The Tribunal's order was pronounced on 27/09/2022.

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