Vishal Pranodkumar Gupta, Ahmedabad V. The Income Tax Officer, Ward-4(2)(5) Present Ward- 4(2)(3), Ahmedabad

ITA 191/AHD/2023

AI Insights

The case revolves around the imposition of a penalty under Section 271(1)(b) of the Income Tax Act on the assessee, Vishal Pranodkumar Gupta, for alleged non-compliance in responding to notices regarding unexplained investments. The Income Tax Department had initially assessed unexplained investments of Rs.6,00,000 for the Assessment Year 2011-12 and reopened the assessment. Despite the assessee's submission of relevant documents and explanations during the assessment proceedings, the Assessing Officer imposed a penalty, which was upheld by the CIT(A). The Tribunal, however, found that the assessee had indeed complied with the statutory notices and had provided the required information, leading to the decision to allow the appeal and delete the penalty.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129301 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 24-05-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 28-03-2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 147; 144; 139; 142(1)

Judgement Text

ITA No.191/Ahd/2023 Assessment Year: 2011-12 Page 1 of 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No.191/Ahd/2023 Assessment Year: 2011-12 Vishal Pranodkumar Gupta, vs. Income Tax Officer, 104, K.K. Nagar, Sector-2, Ward – 4(2)(5), Rannapark, Present ITO, Ward – 4(2)(3), Ghatlodia, Ahmedabad. Ahmedabad – 380 061. [PAN – AKZPG 5161 B] (Appellant) (Respondent) Assessee by : Shri P.F. Jain, AR Revenue by : Shri Atul Pandey, Sr. DR Date of hearing : 25.05.2023 Date of pronouncement : 31.05.2023 O R D E R This appeal is filed by the Assessee against order dated 21.02.2023 passed by the CIT(A), National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year 2011-12. 2. The Assessee has raised the following grounds of appeal :- “1 The Learned Commissioner of Income Tax (Appeals) has erred in law and on facts in upholding the penalty order under Section 271(1)(b) of the Act passed by the A.O. levying penalty of Rs.10,000/- submitted to be bad in law and on facts, as the assessee has complied with the notices and submitted the required details. 2. On the facts of the appellant, no such penalty ought to have been levied.” 3. The assessee is an individual and has not filed his return of income for the Assessment Year (A.Y.) 2011-12. The AIR information on the Income Tax Department systems stated that the assessee has made investment in Mutual Fund/Bond during the Financial Year 2010-11. The system generated letter was issued on 22.07.2015 by the Income Tax Department. The assessee was asked to provide details of investments in Mutual Fund/Bond of Rs.6,00,000/- during the year alongwith documentary evidences and source from which this transaction was made and tax treatment thereof. As per the observations of the Assessing Officer, the ITA No.191/Ahd/2023 Assessment Year: 2011-12 Page 2 of 3 assessee did not respond. Therefore, after recording reasons, the assessment was reopened and show-cause notice dated 19.09.2018 and 24.10.2018 were issued. Thereafter, the assessment was passed under Section 144 read with Section 147 of the Act thereby making addition of Rs.6,00,000/- as unexplained investments. Thereafter, the Assessing Officer issued notice under Section 271(1)(b) of the Act on 27.11.2018 with request to show-cause why an order imposing penalty under Section 271(1)(b) of the Act on the assessee should not be made under Income Tax Act. The Assessing Officer imposed penalty of Rs.10,000/- under Section 271(1)(b) of the Act while passing the order dated 12.04.2019. 4. Being aggrieved by the penalty order under Section 271(1)(b) of the Act, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The Ld. AR submitted that the assessee in the assessment proceedings under Section 147 of the Act has submitted the reply/written submissions dated 08.12.2018 in respect of response to notice under Section 271F of the Act thereby enclosing the e-proceedings response acknowledgement in respect of assessment proceedings under Section 147 of the Act dated 11.09.2018 thereby attaching copy of bank statement as well as mutual fund statements. Thus, the assessee during the assessment proceedings has given the details to the Assessing Officer for which the Assessing Officer has not taken cognisance of these documents and passed ex-parte order. The assessee in the response acknowledgement, in the column of remarks, has categorically stated that the assessee did not file return of income against the notice under Section 144 of the Act and earlier under Section 139 of the Act due to there is no taxable income earned by the assessee which exceeds the basic exemption limit. Further, the assessee explained that the investment is made by the assessee out of earlier savings which can be found from the bank statement. Thus, the ld. AR submitted that penalty under Section 271(1)(b) of the Act is not justifiable and the same should be deleted. 6. The Ld. DR relied upon the Assessment Order, penalty order and the order of the CIT(A). 7. Heard both the parties and perused all the relevant material available on record. It is pertinent to note that the e-proceeding response acknowledgement has categorically mentioned that the submission of the documents in respect of ITA No.191/Ahd/2023 Assessment Year: 2011-12 Page 3 of 3 assessment proceedings under Section 147 of the Act and the submission date was that of 11.09.2018 which is prior to passing of the Assessment Order. Thus, the assessee has responded to statutory notice issued under Section 142(1) of the Act and the same should have been taken into account by the Assessing Officer while passing the Assessment Order. The very purpose of passing of penalty order under Section 271(1)(b) gets defeated because the assessee has responded to notices and furnished details in response to notice under Section 148/142(1) of the Act. Therefore, the penalty under Section 271(1)(b) of the Act does not sustain in assessee’s case. Hence, appeal of the assessee is allowed 8. In the result, appeal of the assessee is allowed. Order pronounced in the open Court on this 31 st day of May, 2023. Sd/- (SUCHITRA KAMBLE) Judicial Member Ahmedabad, the 31 st day of May, 2023 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad