Penalty for Non-Compliance of Notices not Leviable where Assessment Completed u/s 143 based on Information Furnished: ITAT [Read Order]
ITAT Indore holds that penalty for non-compliance cannot survive when assessee later complies and assessment is completed under Section 143(3).
The Income Tax Appellate Tribunal (ITAT), Indore Bench held that the penalty imposed for the alleged non-compliance of the statutory notices cannot be sustained if the assessee complies with the same and the assessment is completed under Section 143(3) of the Income Tax Act, 1961.
The assessee Ujjain Dugdh Sangh (Sah) Maryadit has filed an appeal before the tribunal against the order of the Commissioner of Income Tax.
The National Faceless Appeal Centre (NFAC),who had passed the order imposing a penalty on the assessee. The assessee had failed to comply with the notices issued under Section 142(1) of the Act during the assessment proceeding for Assessment Year 2020-21 for a penalty of ₹30,000 under Section 272A(1)(d).
The assessee had stated that although there was an initial delay in responding to certain notices, the necessary information was furnished subsequently before the AO.
The contention was that the assessment was actually completed under Section 143(3) of the Act, taking into consideration the information furnished by the assessee. Therefore, there was no justification for imposing a penalty for non-compliance.
In contrast, it was contended by the Revenue that the assessee had failed to comply with the notices issued during the assessment proceeding which warranted the levying of penalty under the Act.
The Tribunal comprising Paresh M. Joshi (Judicial Member) and B.M. Biyani (Accountant Member) held that the assessment was actually completed under Section 143(3) of the Act on the basis of information furnished subsequently by the assessee.
The observation of the Bench was that when the assessee had actually complied with the notices issued by furnishing information it was not possible for him to be non-compliant for the purpose of levying penalty.
Therefore, it was held by the Tribunal that the penalty levied under Section 272A(1)(d) was not justified and it was directed that it should be deleted.
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