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Jai Gopal Sondhi, New Delhi vs. ITO, Ward - (Income Tax Appellate Tribunal) (28 Oct 2020)

Subsequent compliance in assessment proceedings is considered as a good compliance and default committed earlier needs to be condoned by the Assessing officer


Direct Taxation

Present appeals have been preferred by the Assessees against the separate orders of the Learned Commissioner of Income Tax (Appeals) {CIT(A)} wherein he has upheld the imposition of penalties under Section 271(1)(b) of the Income Tax Act, 1961 (IT Act). Penalty under Section 271(1)(b) has been imposed by the Assessing Officers on the assessees with respect to the statutory notices issued under the Act.

Although the Assessing Officer has levied penalty in all the four cases for non-compliance of statutory notices, all the same he has proceeded to frame the assessment order under Section 143(3) of the IT Act. The CIT(A), while dismissing the assessees' appeals has observed on identical lines in all the four impugned orders that, subsequent compliance by the assessee to the statutory notices cannot be a basis for non levy of penalty on account of earlier defaults. The Learned CIT(A) has also observed in all the four impugned orders that, the claim of the assessees that, no penalty is leviable since the assessment orders had been issued under Section143(3) of the IT Act was not acceptable as the impugned penalty had been levied for specific defaults on specific dates.

The Co-ordinate Bench of this Tribunal in the case of Akhil Bhartiya Prathmik Shikshak Sangh Bhawan Trust vs. ADIT had taken a view that where the assessee had not complied with notice under Section 142(1) of the IT Act but the assessment order was passed under Section 143(3) of the IT Act and not under Section 144 of the IT Act, that meant that subsequent compliance of assessment proceedings was considered as good compliance and defaults committed earlier were ignored by Assessing Officer and, therefore, levy of penalty under Section 271(1)(b) of the IT Act was not justified. The facts in four appeals are identical to the facts in the case of Akhil Bhartiya Prathmik Shikshak Sangh Bhawan Trust vs. ADIT and further the Department has also not pointed out any order in favour of the Department in this regard. Therefore, in view of order of the Co-ordinate Bench of this Tribunal in the case of Akhil Bhartiya Prathmik Shikshak Sangh Bhawan Trust vs. ADIT, the impugned orders in all the four appeals are set aside and the Assessing Officer is directed to delete the penalty. Appeals allowed.


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