The Surat Bench of the Income Tax Appellate Tribunal (ITAT), comprising Pawan Singh, Judicial Member quashed the Penalty Order under Section 271(1)(b) of the Income Tax Act, 1961 on the ground of non-compliance due to Bonafide Reason.
A search and seizure action under Section 132 of the Income Tax Act was carried out in case of a group of persons dealing in Cryptocurrency. The assessee, Pareshbhai Harshadbhai Gohel, was also covered in the said search action. The Assessing Officer initiated and levied penalty under section 271(1)(b) of Rs. Ten thousand and while passing the penalty order under Section 271(1)(b) of the Income Tax Act, recorded that the assessee failed to comply notice under Section 142(1) for A.Y. 2012-13.
For non-compliance the assessee stated that there was delay due to Covid-19 pandemic due to second wave everywhere and everyone was doing work with proper safety measure. Thus, such non-compliance should not be considered as default for penalizing the assessee. Otherwise, the assessee always co-operated during the assessment and finally order under Section 143(3) of the Income Tax Act.
It is not the case of assessing officer that the assessee remained silent on various notices and response before the Assessing Officer. The assessee subsequently made full compliance, the explanation offered by assessee on various issues was not accepted and ultimately made various additions/disallowances by the Assessing Officer in final assessment order.
Before the CIT(A), the assessee explained that there was reasonable cause for non-filing/response and seeking time for making compliance to the notices issued by assessing officer.
The Division Bench of Delhi Tribunal in Akhil Bhartiya Prathmik Shmshak Sangh Bhawan Trust vs ADIT, observed that subsequent compliance in the assessment proceedings was considered as a good compliance and defaults committed earlier were ignored by Assessing Officer and, therefore, penalty under Section 271(1)(b) of the Income Tax Act was not justified.
The Bench observed that “Thus, considering the fact that assessment in the present case was completed under Section 153A/143(3) in accepting return of income, I find that it was sufficient compliance, merely because the assessee could not make compliance due to some bonafide reason, no penalty under Section 271(1)(b) of the Income Tax Act could be levied on the assessee.”
The Surat Bench of the Income Tax Appellate Tribunal (ITAT), comprising Pawan Singh, Judicial Member quashed the Penalty Order under Section 271(1)(b) of the Income Tax Act, 1961 on the ground of non-compliance due to Bonafide Reason.
A search and seizure action under Section 132 of the Income Tax Act was carried out in case of a group of persons dealing in Cryptocurrency. The assessee, Pareshbhai Harshadbhai Gohel, was also covered in the said search action. The Assessing Officer initiated and levied penalty under section 271(1)(b) of Rs. Ten thousand and while passing the penalty order under Section 271(1)(b) of the Income Tax Act, recorded that the assessee failed to comply notice under Section 142(1) for A.Y. 2012-13.
For non-compliance the assessee stated that there was delay due to Covid-19 pandemic due to second wave everywhere and everyone was doing work with proper safety measure. Thus, such non-compliance should not be considered as default for penalizing the assessee. Otherwise, the assessee always co-operated during the assessment and finally order under Section 143(3) of the Income Tax Act.
It is not the case of assessing officer that the assessee remained silent on various notices and response before the Assessing Officer. The assessee subsequently made full compliance, the explanation offered by assessee on various issues was not accepted and ultimately made various additions/disallowances by the Assessing Officer in final assessment order.
Before the CIT(A), the assessee explained that there was reasonable cause for non-filing/response and seeking time for making compliance to the notices issued by assessing officer.
The Division Bench of Delhi Tribunal in Akhil Bhartiya Prathmik Shmshak Sangh Bhawan Trust vs ADIT, observed that subsequent compliance in the assessment proceedings was considered as a good compliance and defaults committed earlier were ignored by Assessing Officer and, therefore, penalty under Section 271(1)(b) of the Income Tax Act was not justified.
The Bench observed that “Thus, considering the fact that assessment in the present case was completed under Section 153A/143(3) in accepting return of income, I find that it was sufficient compliance, merely because the assessee could not make compliance due to some bonafide reason, no penalty under Section 271(1)(b) of the Income Tax Act could be levied on the assessee.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
