2022 (6) TMI 1537 - AT - Income Tax

Penalty under Section 271(1)(c) deleted as assessment under Section 143(3) shows sufficient compliance

The ITAT Mumbai held that since the assessment was completed under section 143(3), it demonstrated sufficient compliance by the assessee and the AO had ... Levy of penalty u/s.271(1)(b) - non-compliance on the scheduled date of hearing - HELD THAT:- Ultimately, we find that the assessment was completed by the AO u/s.143(3) of the Act only. When an assessment has been completed u/s.143(3) of the Act, it goes to prove that there was sufficient compliance by the assessee by furnishing the requisite details before the ld. AO and that the ld. AO had indeed condoned the absence of the assessee on earlier occasion. Hence, we deem it fit that this is not a fit case for levy of penalty u/s.271(1)(c) of the Act. We direct the ld. AO to delete the said penalty. Accordingly, the grounds raised by the assessee are allowed. The Appellate Tribunal (ITAT Mumbai) in ITA No.1916/Mum/2021 for A.Y.2016-17 addressed the issue of whether the penalty under section 271(1)(b) of the Income Tax Act, 1961, was rightly imposed and upheld by the Commissioner of Income Tax (Appeals) (CIT(A)). The penalty of Rs.10,000/- was levied by the Assessing Officer (AO) for non-compliance due to the assessee's absence at the scheduled hearing on 29/05/2018. The Tribunal noted that although the assessee was absent on the scheduled date, the authorised representative appeared the next day (30/05/2018) and on several subsequent occasions, furnishing all requisite details. The assessment was ultimately completed under section 143(3), indicating sufficient compliance and that the AO had effectively condoned the initial absence. The Tribunal relied on precedent decisions, including Ganesh B Pokhriyal vs ACIT and Globus Infocom Ltd. vs DCIT, supporting the view that penalty under section 271(1)(b) is not justified where the assessee cooperates and complies subsequently. The Tribunal held, 'this is not a fit case for levy of penalty u/s.271(1)(b) of the Act' and directed deletion of the penalty. The appeal was allowed accordingly.