International Seaport (Haldia) Private Limited , Kolkata V. DCIT, Circle - 12(1), Kolkata

ITA 171/KOL/2023

AI Insights

The case revolves around a penalty imposed by the Assessing Officer (AO) on International Seaport (Haldia) Private Limited for alleged non-compliance with notices under section 142(1) of the Income Tax Act, 1961. The AO levied a penalty of Rs. 20,000, citing non-compliance on two occasions. The assessee contested this penalty before the CIT(A), which was upheld. However, upon appeal to the Income Tax Appellate Tribunal, it was found that the assessee had indeed complied with the notices, just not on the initially stipulated dates due to a technical issue with the IT portal. The Tribunal referenced decisions from other benches, noting that penalties for non-compliance during the assessment proceedings are not justified if the assessment is completed under section 143(3) and not section 144 of the Act.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 128807 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 31-05-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 02-03-2023
• Other Referred Cases: Akhil Bhartiya Prathmik Shmshak Sangh Bhawan Trust vs. ADIT, Pilala Vishnu Vandana vs. ACIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 144; 143(3); 142(1); 274; 272A

Judgement Text

आयकर अपीलीय अधिकरण कोलकाता 'सी' पीठ, कोलकाता म ें IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘C’ BENCH, KOLKATA श्री राज े श क ु मार, ल े खा सदस्य एवं श्री संजय शमा ा , न्याधयक सदस्य क े समक्ष Before SRI RAJESH KUMAR, ACCOUNTANT MEMBER & SONJOY SARMA, JUDICIAL MEMBER I.T.A. No.: 171/KOL/2023 Assessment Year: 2017-18 International Seaport (Haldia) Private Limited........Appellant [PAN: AAACI 9468 D] Vs. ACIT, Circle-12(1), Kolkata...................................Respondent Appearances by: Sh. Somnath Ghosh, Adv., appeared on behalf of the Assessee. Sh. Vijay Kumar, Addl. CIT, Sr. D/R, appeared on behalf of the Revenue. Date of concluding the hearing : June 1 st , 2023 Date of pronouncing the order : June 28 th , 2023 ORDER Per Rajesh Kumar, Accountant Member: The only issue raised by the assessee in the various grounds of appeal is confirmation of addition of Rs. 20,000/- by ld. CIT(A) as levied by ld. AO u/s 274 r.w.s. 272A(1)(d) of the Income Tax Act, 1961 (in short the 'Act'). I.T.A. No.: 171/KOL/2023 Assessment Year: 2017-18 International Seaport (Haldia) Private Limited. Page 2 of 4 2. The facts in brief are that the Assessing Officer (in short ld. 'AO') upon finding that the assessee has not complied with and attended the dates fixed for hearings and therefore, initiated the penalty proceedings by issuing notice u/s 272A sub-Section 1 Clause ‘d’ of the Act as to why the penalty should not be levied for non-compliance. The AO finally observed that the assessee has failed without reasonable cause to comply with the notice u/s 142(1) of the Act dated 04.12.2019 as well as dated 17.10.2019 and thereby failing to comply with the notices within the meaning of Section 272A(1)(d) of the Act on two occasions and accordingly levied penalty of Rs. 10,000/- for each default thereby imposing penalty of Rs. 20,000/- in the order passed u/s 272A(1)(d) of the Act dated 08.02.2022. 3. The assessee assailed the said order before ld. CIT(A), however, ld. CIT(A) dismissed the appeal of the assessee by observing that assessee has failed to respond to the show cause notices issued by ld. AO. 4. After hearing rival contentions and perusing the impugned order, the undisputed facts as culling out of the records are that assessee could not comply with the notice issued u/s 142(1) of the Act dated 04.12.2019 as link to respond to notice was not available due to technical snag and glitch in the IT portal and the same has been complied with on 18.12.2019 against the notice dated 15.12.2019 (Sunday, when the link was made available). We, further observe that the compliance to notice u/s 142(1) of the Act dated 17.10.2019 was made by the appellant on 24.10.2019 and thus, there was no issue of non-compliance as observed by the I.T.A. No.: 171/KOL/2023 Assessment Year: 2017-18 International Seaport (Haldia) Private Limited. Page 3 of 4 authorities below. Ld. A/R submitted before us that though there was non-compliance as alleged by ld. AO to the notice issued u/s 142(1) of the Act but the assessment order was framed u/s 143(3) of the Act dated 20.12.2019 and not u/s 144 of the Act meaning thereby that there was subsequent compliance in the assessment proceedings which was to be considered as good compliance and the fault committed earlier would be ignored and could not to be treated as non-compliance. The ld. AR submitted that levy of penalty in such a scenario u/s 272A(1)(d) of the Act would not be leviable and in support of this he relied on the decision of Delhi Tribunal in the case of Akhil Bhartiya Prathmik Shmshak Sangh Bhawan Trust vs. ADIT in [2008] 115 TTJ 419 (Delhi). 5. We have perused the decision and observe that in the said case the coordinate Bench has held that penalty u/s 271(1)(b) of the Act is not justified for non-compliance during the assessment proceedings. In the instant case we observe that, the order was framed u/s 143(3) of the Act and not u/s 144 of the Act meaning thereby that the assessee has complied with the notices in the subsequent dates and penalty imposed u/s 272A(1)(d) of the Act was not justified. Ld. A/R has also referred to the decision of Visakhapatnam Tribunal in the case of Pilala Vishnu Vandana vs. ACIT reported in [2017] 88 taxmann.com 803 (Visakhapatnam- Trib.) wherein it has been held that any failure on the part of the assessee to comply with the notice on the date of hearing because of insufficient time given by ld. AO to collect the information and assessment was finally completed after the assessee fully supplied all the material facts required for the assessment proceedings, the I.T.A. No.: 171/KOL/2023 Assessment Year: 2017-18 International Seaport (Haldia) Private Limited. Page 4 of 4 initial failure of the assessee became technical and did not warrant penalty u/s 271(1)(b) of the Act. 6. Considering these facts in light of the aforesaid decision we are inclined to set aside the order of ld. CIT(A) as the assessee has complied with these notices and direct the AO to delete the penalty levied u/s 272A(1)(d) of the Act. 7. In the result, the appeal filed by the assessee is allowed. Kolkata, the 28 th June, 2023. Sd/- Sd/- [Sonjoy Sarma] [Rajesh Kumar] Judicial Member Accountant Member Dated: 28.06.2023 Bidhan (P.S.) Copy of the order forwarded to: 1. International Seaport (Haldia) Private Limited, C/o. S.N. Ghosh & Associates, Advocates 2, Garstin Place, 2 nd Floor. Suite No. 203, Off Hare Street, Kolkata-700 001. 2. ACIT, Circle-12(1), Kolkata. 3. CIT(A)-NFAC, Delhi. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata