LABH SINGH PANCHKULA,PANCHKULA V. INCOME TAX OFFICER, WARD 2, PANCHKULA, PANCHKULA

ITA 733/CHANDI/2025

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The case involves Labh Singh, the appellant, who faced penalties under section 271(1)(b) of the Income-tax Act, 1961, for non-compliance with statutory notices during the assessment proceedings for the year 2011-12. The Assessing Officer (AO) issued notices under sections 143(2) and 142(1), which were not complied with by the assessee, leading to a penalty of \\u20b940,000. The CIT(A) upheld this penalty. The Tribunal considered the appellant's illiteracy and the fact that the non-compliances occurred in the same set of proceedings, deciding to reduce the penalty to \\u20b920,000.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 774971 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-09-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 20-05-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SURINDER KAUR WARAICH
• Assessee Lawyers: RISHAB GUPTA
• Keywords: Reasonable cause
• Section: 142(1)

Judgement Text

" आयकर अपीलȣय अͬधकरण, चÖडीगढ़ Ûयायपीठ, चÖडीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH, ‘SMC’, CHANDIGARH BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER आयकर अपील सं./ ITA No. 733/CHD/2025 Ǔनधा[रण वष[ / Assessment Year : 2011-12 Labh Singh, C/o M.K.Aggarwal & Associates, SCO 1,First Floor, Sector 11, Panchkula बनाम Vs. ITO, Ward 2, Panchkula èथायी लेखा सं./PAN NO: DIDPS5445F अपीलाथȸ/Appellant Ĥ×यथȸ/Respondent ( Hybrid Hearing ) Ǔनधा[ǐरती कȧ ओर से/Assessee by : Sh Rishab Gupta, CA राजèव कȧ ओर से/ Revenue by : Smt. Surinder Kaur Waraich, Addl. CIT, Sr. DR (Virtual) सुनवाई कȧ तारȣख/Date of Hearing : 28-08-2025 उदघोषणा कȧ तारȣख/Date of Pronouncement : 01.09-2025 आदेश/Order This appeal by the assessee is directed against the order of the learned CIT(A), confirming the penalty levied under section 271(1)(b) of the Income-tax Act, 1961. 2. The Assessing Officer (AO), in the course of assessment proceedings, issued statutory notices under sections 143(2) and 142(1) on various dates. Since the assessee did not Printed from counselvise.com 2 comply with the notices, the AO levied a penalty of ₹40,000/- under section 271(1)(b), being ₹10,000/- for each of four defaults. The learned CIT(A) confirmed the levy. 3. Aggrieved, the assessee is in appeal before the Tribunal. 4. The learned Authorised Representative submitted that the assessee is an illiterate person and was unable to respond to all notices properly, and there was no deliberate defiance of statutory notices. In any case, multiple penalties for the same proceedings are harsh, and the penalty should be restricted reasonably. 5. The learned Departmental Representative relied on the orders of the AO and the CIT(A), and submitted that the assessee repeatedly failed to comply with statutory notices without reasonable cause, therefore penalty was rightly levied for each default. 6. I have considered the rival submissions and perused the record. The brief facts of the case are that the Assessing Officer in the course of assessment proceedings issued statutory notices under sections 143(2) and 142(1) on different dates. Since there was no compliance on the part of Printed from counselvise.com 3 the assessee, the Assessing Officer initiated penalty proceedings under section 271(1)(b) of the Income-tax Act and ultimately levied a penalty of ₹40,000/-, being ₹10,000/- for each of four instances of default. The learned CIT(A) sustained the levy of penalty in appellate proceedings. Aggrieved, the assessee is now in appeal before the Tribunal. 7. The learned Authorised Representative submitted that the assessee is an illiterate individual who was unable to appreciate the implications of multiple statutory notices. It was contended that there was no deliberate defiance of law, and in any case, levy of penalty for four separate instances arising in the same proceedings is harsh and excessive. Reliance was placed on judicial precedents to submit that penalty under section 271(1)(b) should not be imposed mechanically and deserves to be restricted. 8. The learned Departmental Representative, on the other hand, relied upon the orders of the authorities below and argued that despite repeated statutory notices, the assessee did not respond, and therefore penalty was rightly levied for each instance of non-compliance. Printed from counselvise.com 4 9. I have carefully considered the rival contentions. It is not in dispute that there was non-compliance with certain statutory notices issued during assessment proceedings. However, having regard to the fact that the assessee is an illiterate person of limited means and that the non- compliances occurred in the same set of proceedings, in my considered view, levy of penalty for all four defaults would be excessive. The ends of justice would be met if the penalty is restricted to two instances of default. Accordingly, I sustain the penalty to the extent of ₹20,000/- (₹10,000 × 2) and direct that the balance penalty of ₹20,000/- be deleted. 10. In the result, the appeal of the assessee is partly allowed. Order pronounced on 01.09.2025. Sd/- ( LALIET KUMAR ) Judicial Member “आर.क े.” आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the order forwarded to : 1. अपीलाथȸ/ The Appellant 2. Ĥ×यथȸ/ The Respondent 3. आयकर आयुÈत/ CIT 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय आͬधकरण, चÖडीगढ़/ DR, ITAT, CHANDIGARH 5. गाड[ फाईल/ Guard File सहायक पंजीकार/ Assistant Registrar Printed from counselvise.com "