TaxTMI 
TaxTMI 
2014 (2) TMI 577
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....of the Income Tax Act for alleged default committed by the assessee on 31.10.2011. 3. In this case the AO levied the penalty u/s. 271(1)(b) holding as under:- "The assessee has failed to comply with the notice u/s. 143(2) of the Act dated 17.10.2011, issued to and duly served on it, the provisions contained in section 271(1)(b) of the Income Tax Act, 1961 are hereby invoked and accordingly a penalty of Rs. 10,000/- is hereby imposed on the assessee. As the assessee has also completely failed to show any cause for failure on its part to comply with a notice u/s. 142(1) read with letter dated 24.10.2011, issued to and duly served on it, the provisions contained in section 271(1)(b) of the Income Tax Act, 1961 are hereby invoked and accordi....
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....ik Shikshak Sangh Bhawan Trust vs. Assistant Director of Income Tax, (2008) 115 TTJ (Del.) 419. In this case it was held that assessment have been made under section 143(3) and not under section 144 of the IT Act. It means that subsequent compliance in the assessment proceedings was considered as good compliance and the defaults committed earlier were ignoring by the AO. Hence, the penalty u/s. 271(1)(b) could not be levied. 6.1 Ld. DR on the other hand relied upon the order of the Ld. CIT(A). 7. We have carefully considered the submissions and perused the records. We find considerable cogency in the Ld. Counsel of the assessee's submission that the show cause notice does not mention about the non-compliance of notice on which penalty has....
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....under section 271(1)((b) of the Act. Accordingly, the same is cancelled." 8. Furthermore, we also note that assessment in this case were completed u/s. 143(3) of the I.T. Act, it does mean the subsequent compliance in the assessment proceedings was considered as good compliance. The decision relied upon by the Ld. Counsel of the assessee as above also come to the rescue of the assessee. 8.1 Furthermore, we find that Hon'ble Apex Court in a decision rendered by a larger Bench comprising of three of their Lordships in the case of Hindustan Steel vs. State of Orissa in 83 ITR 26 held that that "An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceedings, and penalty will not ordinar....