Income Tax Appellate Tribunal

Usha Goyal, Delhi vs. DCIT

MANU/ID/0474/2024

09.05.2024

Direct Taxation

When reasonable cause for non-compliance with notice is crystal clear, assessee need not to be visited with rigours of penalty

The Appellant has filed her return of income under Section 139 of the Income Tax Act, 1961 on 27.03.2015 declaring income of Rs.41,42,690. Assessing Officer issued notice under section 274 read with Section 271(1)(b) of the Income Tax Act, 1961 and asked the appellant to show cause as to why an order imposing a penalty should not be made under section 271(1)(b) of the IT Act for non compliance of notice issued under Section 142(1) of the Act.

AO imposed penalty of Rs.10,000 under section 271(1)(b) of the Act, vide order for failure to comply with the notice issued under section 142(1) of the Income Tax Act, 1961. Against this levy of penalty, assessee appealed before the learned CIT(A) who confirmed the same.

Penalty of Rs.10,000 under Section 271(1)(b) of the IT Act has been imposed in this case on the failure of the assessee to comply with the notice though it is also recorded that on 08th November, 2019, assessee had requested the Assessing Officer to adjourn the hearing as her Authorised Representative was out of Delhi. When the reasonable cause for non-compliance with the notice is crystal clear, assessee need not to be visited with the rigours of penalty under Section 271(1)(b) of the Act.

Apex Court in the case of Hindustan Steel Ltd. vs. State of Orissa has held that, assessee may not be visited with rigours of penalty if the assessee's conduct is not found to be contumacious. The conduct of the assessee in this case is not contumacious. Accordingly, in the background of the facts and circumstances of the case, the orders of the authorities below are set aside and the penalty levied of Rs.10,000 is deleted. Appeal of the assessee is allowed.

Tags : Penalty Imposition Legality

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