JARUL GLASSWORK PRIVATE LIMITED,. V. ITO, WARD 1(3), FARIDABAD, .

ITA 4514/DEL/2024

AI Insights

The case involves Jarul Glasswork Private Limited appealing against a penalty of Rs. 10,000 imposed by the Income Tax Officer for alleged non-compliance with a notice under section 142(1) of the Income Tax Act, 1961. The Tribunal examined the compliance history of the assessee with various notices under section 142(1) and found that the assessee had complied with subsequent notices, including a show-cause notice under section 271(1)(b). The Tribunal noted that the penalty was imposed without further notice after the assessee complied with the show-cause notice, which raised concerns about adherence to the principles of natural justice. The Tribunal referenced the Supreme Court's decision in Hindustan Steel Ltd. to emphasize that penalties should not be imposed unless there is a deliberate defiance of the law or conduct that is contumacious or dishonest.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126770 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2016-2017
• Other Referred Cases: Hindustan Steel Ltd. vs. State
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: OM PRAKASH
• Assessee Lawyers: SHYAM SUNDER
• Keywords: Set aside; Principle of natural justice; Quasi-criminal; Dismissed; HRA; Commissioner; Commissioner of Income Tax
• Section: 143(3); 142(1)

Judgement Text

" 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘C’: NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI AVDHESH KUMAR MISHRA, ACCOUNTANT MEMBER ITA No.4514/Del/2024, A.Y. 2016-17 Jarul Glasswork Private Limited H-35, 1st Floor, Jangpura Extension, New Delhi-110014 PAN: AADCJ1891J Vs. Income Tax Officer, Ward 1(3), Faridabad (Appellant) (Respondent) Appellant by Sh. Shyam Sunder, Advocate Respondent by Sh. Om Prakash, Sr. DR Date of Hearing 21/04/2025 Date of Pronouncement 25/04/2025 ORDER PER AVDHESH KUMAR MISHRA, AM The appeal of the assessee for the Assessment Year (hereinafter, the ‘AY’) 2016-17 is directed against the order dated 14.08.2024 passed by the Additional/Joint Commissioner of Income Tax (Appeals)-9, Mumbai [hereinafter, the ‘ Addl. 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 dated 21.08.2018 issued under section 142(1) of the Act. ITA No.4514/Del/2024 Jarul Glasswork Pvt. Ltd. 2 3. The Ld. Counsel submitted that the assessee had ensured compliance from time to time and that was why the assessment was completed under section 143(3) of the Act. It was submitted that the assessee ensured compliance to the notice dated 13.07.2018 issued under section 142(1) of the Act on 18.08.2018. Subsequent notice issued under section 142(1) of the Act was complied with on 04.10.2018. The Ld. Counsel emphasized on the fact that it was not a case of complete non- compliance on the part of the assessee. Acknowledgements of the above mentioned replies were place on the record (pages 3-5 of the PB). Our attention was drawn to the fact that the penalty notice under section 271(1)(b) of the Act was initiated vide show-cause notice dated 24.09.2018, which was compiled with by the assessee on 04.10.2018. Thereafter, the AO, without issuing any further penalty notice, levied the penalty on 20.03.2019 observing that the assessee did not ensure compliance to the show-cause notice issued under section 271(1)(b) of the Act. Such action of the AO was against the principle of the natural justice, argued the Ld. Counsel. Our attention was also drawn to the fact that the assessee filed belated appeal before the Addl. CIT(A), who did not condone the delay and dismissed the appeal. The Ld. Counsel admitted that the detailed delay condonation application was filed during the appellate proceedings before the Addl. CIT(A). However, he did not appreciate the ITA No.4514/Del/2024 Jarul Glasswork Pvt. Ltd. 3 same and dismissed the appeal of assessee without adjudicating the case on merit. On the other hand, the Ld. Sr. DR, placing reliance on orders of lower authorities, prayed for dismissal of the appeal. 4. We have heard both parties and have perused the material available on the record. 5. 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 21.08.2018 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.4514/Del/2024 Jarul Glasswork Pvt. Ltd. 4 6. In the result, the appeal of the assessee is allowed as above. Order pronounced in open Court on 25th April, 2025 Sd/- Sd/- (ANUBHAV SHARMA) (AVDHESH KUMAR MISHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated:25th /04/2025 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 "