BASANT KUMAR RAUT,DELHI V. ACIT, CIRCLE-61(1), DELHI

ITA 1138/DEL/2021

AI Insights

The case involves Basant Kumar Raut, an engineering consultant, who appealed against a penalty of Rs. 10,000 imposed by the Assistant Commissioner of Income Tax for non-compliance with a notice under section 142(1) of the Income Tax Act, 1961. The notice was issued on 19.07.2018, and although Raut did not comply by the due date, he later complied, leading to the completion of the assessment under section 143(3). The Tribunal considered the circumstances of the non-compliance, including the method of notice delivery (via email) and the eventual compliance by Raut, and decided to set aside the penalty.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474950 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Other Referred Cases: Hindustan Steel Ltd. vs. State of Orissa
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHISH TRIPATHI
• Keywords: Set aside
• Section: 143(3); 142(1)

Judgement Text

" 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’: NEW DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI AVDHESH KUMAR MISHRA, ACCOUNTANT MEMBER ITA No.1138/Del/2021, A.Y. 2016-17 Basant Kumar Raut, 14 School Lane, 1st Floor, Barakhamba Road, New Delhi-110001 PAN: AAHPR2765C Vs. Assistant Commissioner of Income Tax, Circle 61(1), E-2, Civic Centre, Minto Road New Delhi (Appellant) (Respondent) Appellant by None Respondent by Sh. Ashish Tripathi, Sr.DR Date of Hearing 03/03/2025 Date of Pronouncement 12/03/2025 ORDER PER AVDHESH KUMAR MISHRA, AM The appeal for the Assessment Year (hereinafter, the ‘AY’) 2016-17, filed by the assessee is directed against the order dated 19.07.2021 passed by the Commissioner of Income Tax (Appeals), NFAC, Delhi [hereinafter, the ‘CIT(A)’]. 2. The sole issue in dispute before us is in respect of levy of penalty of Rs. 10,000/- under section 271(1)(b) of the Income Tax Act, 1961 (hereinafter, the ‘Act’) for non-compliance of notice issued under section 142(1) of the Act. ITA No.1138/Del/2021 Basant Kumar Raut 2 3. Since, none was present on behalf of the assessee; therefore, the Ld. Senior Departmental Representative (hereinafter, the ‘Sr. DR’) was heard. The Ld. Sr. DR contended that the Assessing Officer (hereinafter, the ‘AO’) had levied penalty of Rs.10,000/- for non-compliance of statutory notice issued under section 142(1) of the Act as detailed in the penalty order. The Ld. Sr. DR, placing reliance on the finding of the Ld. CIT(A), submitted that the penalty order and impugned appellate order clearly demonstrated that the assessee had made non-compliance in a tactical way to avoid investigations. Hence, the appeal deserved deletion. 4. We have heard the Sr. DR and have perused the material available on the record. It is evident from the record that the assessee, an Engineering Consultant, filed his Income Tax Return (hereinafter, the ‘ITR’) on 17.10.2016 declaring income of Rs.2,98,79,750/-. The case was picked up for scrutiny. Consequentially, the assessment was completed at income of Rs. 3,40,73,552/-. During the course of assessment proceedings, the assessee did not ensure any compliance of notice dated 19.07.2018 issued under section 142(1) of the Act. Thereafter, the AO levied the penalty of Rs.10,000/- under section 271(1)(b) of the Act on the reasoning that the assessee had neither ensured any compliance of the notice dated 19.07.2018 issued under section 142(1) of the Act nor under section 271(1)(b) of the Act. The Ld. Sr. DR, placing reliance on orders of lower authorities, prayed for dismissal of the appeal. ITA No.1138/Del/2021 Basant Kumar Raut 3 5. It is evident from the record that the AO had sent the notice dated 19.07.2018 issued under section 142(1) of the Act through the e-mail. However, the assessee did not see his e-mail before the compliance date; therefore, the same remained un-complied with. However, the assessee ensured compliance later on, which resulted completion of the assessment under section 143(3) of the Act. 6. The Hon‘ble Supreme Court, in the case of Hindustan steel Ltd. 83 ITR 26 has held 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 ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest or acted in conscious disregard of its obligation. As discussed above, we have taken note of the fact that the assessee has ensured regular compliance of the statutory notices after August, 2018. Thus, it appears that the provisions of Section 271(1)(b) of the Act have been used by the AO as a deterrent to ensure timely compliance. We are satisfied with the reasons of non-compliance of the notice dated 19.07.2018 issued under section 142(1) of the Act as there is no deliberate defiance of law or is guilty of conduct contumacious or dishonest or act in conscious disregard of the legal obligation. We therefore, hereby set aside the impugned order and delete the penalty of Rs.10,000/-. ITA No.1138/Del/2021 Basant Kumar Raut 4 7. In the result, the appeal of the assessee is allowed as above. Order pronounced in open Court on 12th March, 2025 Sd/- Sd/- (VIKAS AWASTHY) (AVDHESH KUMAR MISHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 12/03/2025 Binita, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT/CIT 4. CIT(A) 5. Sr. DR-ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "