SVP Precast Pvt. Ltd., Ahmedabad V. The ITO, Ward-4(1)(2), Ahmedabad

ITA 316/AHD/2021

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SVP Precast Private Ltd. appealed against the penalty order confirmed by the Commissioner of Income Tax (Appeals), Ahmedabad, which was initially imposed by the Assessing Officer for non-compliance with notices under Section 142(1) of the Income Tax Act, 1961 during the assessment year 2016-17. The Tribunal considered a similar case, Smt. Rekha Rani Vs. DCIT, where it was held that a penalty for the first default of non-compliance with a notice under Section 142(1) was sufficient. The Tribunal found that imposing a penalty for each default of non-compliance with notices under Section 143(2) was not the intention of the legislature and restricted the penalty to Rs. 10,000 for the first default only.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135800 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: A
• Next Hearing Date: 09-08-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 30-11-2021
• Other Referred Cases: Smt. Rekha Rani Vs. DCIT in ITA No. 6131/DEL/2013
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

आयकरअपीलीयअधिकरण , अहमदाबादनयायपीी INTHEINCOMETAXAPPELLATETRIBUNAL, ‘’A’’BENCH,AHMEDABAD BEFORESHRIWASEEMAHMED,ACCOUNTANTMEMBER And SHRIT.RSENTHILKUMAR,JUDICIALMEMBER आयकरअपीलसं./ITANo.316/AHD/2021 धििाधरणवरध / Asstt.Year:2016-2017 SVPPrecastPrivateLtd., 101,ShayamakComplex, Opp.IncomeTaxBhavan Panjrapole,Ambawadi, Ahmedabad. PAN:AAPCS9216C Vs. I.T.O, Ward-4(1)(2), Ahmedabad. (Applicant)(Respondent) Assesseeby:ShriHardikVora,A.R Revenueby:ShriSanjayKumar,Sr.D.R सुिवाईकीतारीख/DateofHearing:10/08/2023 घोरणाकीतारीख/DateofPronouncement:18/08/2023 आदेश /ORDER PERWASEEMAHMEDACCOUNTANTMEMBER: ThecaptionedappealhasbeenfiledattheinstanceoftheAssessee againsttheorderoftheLearnedCommissionerofIncomeTax(Appeals), Ahmedabad,(inshort“Ld.CIT(A)”)arisinginthematterofpenaltyorderpassed unders.271(1)(b)oftheIncomeTaxAct1961(here-in-afterreferredtoas"the Act")relevanttotheAssessmentYear2016-17. ITAno.316/AHD/2021 Asstt.Year2016-17 2 2.TheonlyissueraisedbytheassesseeinthisappealisthatLd.CIT(A)erred inconfirmingthepenaltyleviedintheorderpassedu/s271(1)(b)oftheAct. 3.Briefly,thefactsarethattheassesseeisaprivatelimitedcompanyand subjecttothescrutinyassessmentproceedingsundersection143oftheActbut failedtofiletheresponsetothevariousnoticesissuedundersection142(1)ofthe Act.Inviewoftheabove,theAOinitiatedpenaltyproceedingsu/s271(1)(b)of theActforthefailureoftheassesseetocomplywithnotices.Finally,theAO imposedthepenaltyfor₹10,000/-foreachdefaultcommittedbytheassessee aggregatingtoRs.50,000.00asdiscussedaboveundertheprovisionsofsection 271(1)(b)oftheAct. 4.Aggrieved,assesseepreferredanappealbeforetheLd.CIT(A),who confirmedtheorderoftheAO. 5.Aggrievedbythis,theassesseehascomeupinappealbeforeus. 6.Theld.ARbeforeussubmittedthatnoneofthenoticewasreceivedbythe assesseeandsonocompliancewasmade.Accordingtotheld.AR,therewasno intentionoftheassesseefornon-complianceofthenoticesissueduponit. 7.Onotherhand,thelearnedDRbeforeusvehementlysupportedtheorder oftheauthoritiesbelow. 8.WehaveheardthelearnedARandtheDRandperusedandcarefully consideredthematerialsonrecord.Attheoutsetitwasobservedthatinthe identicalfactsandcircumstances,theDelhiTribunalhasdecidedtheissuein favourofassesseeinpartinthecaseofSmt.RekhaRaniVs.DCITinITANo. 6131/DEL/2013byobservingthatpenaltyforthefirstdefaultofnon-compliance ofnoticeundersection142(1)oftheActwassufficientenough.Therelevant extractoftheorderreadsasunder: ITAno.316/AHD/2021 Asstt.Year2016-17 3 5.WehaveconsideredthesubmissionsoflearnedDRandhaveperusedtheorderofthe AssessingOfficerandthelearnedCIT(A).wefindthattherewasnoreasonablecauseon thepartoftheassesseefornotappearingonthedifferentdatesofhearingbeforethe AssessingOfficerinresponsetonoticeissuedunderSection143(2)oftheAct.However, wefindthatthedefaultissameand,therefore,penaltyofRs.10,000/-couldbeimposed forthefirstdefaultmadebytheassesseeinthisregard.ThepenaltyunderSection 271(1)(b)couldnotbeimposedforeachandeverynoticeissuedunderSection143(2), whichremainednotcompliedwithonthepartoftheassessee.TheprovisionofSection 271(1)(b)isofdeterrentnatureandnotforearningrevenue.Anyotherviewtakenshall leadtotheimpositionofpenaltyforanynumberoftimes(withoutlimits)forthesame defaultofnotappearinginresponsetothenoticeissuedunderSection143(2)oftheAct. Thisdoesnotseemtobetheintentionofthelegislatureinenactingtheprovisionsof Section271(1)(b)oftheAct.Incaseoffailureoftheassesseetocomplywiththenotice underSection143(2)oftheAct,theremedywiththeAssessingOfficerlieswithframingof "bestjudgementassessment"undertheprovisionsofSection144oftheActandnotto imposepenaltyunderSection271(1)(b)oftheActagainandagain.Inthisviewofthe matter,werestrictthepenaltyleviedunderSection271(1)(b)oftheActtothefirstdefault oftheassesseeinnotcomplyingwiththenoticeunderSection143(2)oftheAct. Accordingly,thepenaltyimposedisrestrictedtoRs.10,000/-asagainstRs.50,000/- confirmedbythelearnedCIT(A).Thegroundsofappealoftheassesseearethuspartly allowed. 8.1RespectfullyfollowingtheaforesaidorderofDelhiTribunal,wesetaside theorderofLd.CIT(A)anddirecttheAOtodeletethepenaltytothetuneof₹ 40,000/-andconfirmthepenaltyof₹10,000/-only.Hence,thisgroundof assessee’sappealispartlyallowed. 9.Intheresult,theappealoftheassesseeispartlyallowed. OrderpronouncedintheCourton18/08/2023atAhmedabad. Sd/-Sd/- (T.RSENTHILKUMAR)(WASEEMAHMED) JUDICIALMEMBERACCOUNTANTMEMBER (TrueCopy) Ahmedabad;Dated18/08/2023 Manish