Anupama Links Private Ltd., New Delhi vs Assessee

This appeal has been preferred by the assessee against the

order of the Commissioner of Income Tax (Appeals) - II, New Delhi

dated 14/05/2013 in appeal no. 39/ 2011-12 for AY 2009-10 by 2 ITA NO. 4186/ Del/2013

which penalty order dated 17.06.2011 imposing penalty of Rs.

10,000/- u/s 271(1)(b) of the Income Tax Act, 1961 (for short the Act)

has been upheld.

2. Although, the assessee has raised as many as 7 grounds in this

appeal but except ground no one other grounds are argumentative

and supportive to the main ground no. 1 which reads as under :-

"That on the facts and circumstances of the case and the provisions of law, the Ld. CIT (Appeals) has failed to appreciate that the order levying penalty passed by the Ld. AO u/s 271(1)(b) is illegal, bad in law, without jurisdiction, time barred and wrong on facts."

3. We have heard argument of both the sides and carefully

perused the relevant material placed on the records. The Ld.

Assessee's Representative (AR) placed his reliance on the various

decisions of coordinate bench of Tribunal including decision of ITAT,

Delhi Bench F in ITA No. 427/ Del/ 2013 dated 24.6.2014 for A.Y.

2009-10 wherein dealing with the other decisions of the Tribunal on

the similar point it has been held thus ;

"3. Penalty u/s 271(1)(b) has been levied for the assessee's failure to comply with the notice issued u/s 142(1) of the Act alongwith the detailed questionnaire, fixing the case for hearing to 18.11.2010. At the very outset the Ld. AR submitted less than 10 days were given to the comply with the notice and therefore penalty u/s 271(1)(b) was not justified. It was submitted under similar 3 ITA NO. 4186/ Del/2013

circumstances the Hon'ble Tribunal in the following cases have deleted the penalty :-

(i) Ivan Infotech Privat Limited vs. ACIT, ITA No. 4460/Del/2013 (Order dated 23.1.2014)(Pages Nos. 17 to 20 of Paper Book)

(ii) Tanvir Finance & Leasing Private Limited vs. ACIT, ITA No. 4238/Del/2013 (Order dated 14.3.2014)(Pages Nos. 21 to 25 of Paper Book),

(iii) Satkar Roadlines Private Limited vs. ACIT, ITA No. 4187/Del/2013 (Order dated 12.3.2014)(Pages Nos. 29 to 33 of Paper Book) and

(iv) Shivaansh Advertising and Publications (P) Ltd. vs. ACIT, ITA No. 4239/Del/2013 (Order dated 3.1.2014)(Pages Nos. 34 & 35 of Paper Book)

4. The Ld. DR relied on the orders of the Income Tax authorities .

5. We have heard rival submissions and perused the material on record. Notice u/s 142 (1) of the case was issued on 8.11.2010 along with the detailed questionnaire fixing the case for hearing to 18.11.2010. It is not mentioned in the penalty order when the notice has been served upon the assessee. Even it is presumed that the notice was served on the next dates or within two or three days, the period left with the assessee to comply with the notice was too short to be held as a reasonable period for comply with the notice. Therefore, in our opinion the time of less than 10 days allowed by the AO for complying with the detailed questionnaire cannot be said to be sufficient time being allowed to the assesee and therefore failure of the assessee to comply with such notice can not be said to be a default which may justify the levy of penalty u/s 271 (1)

(b) of the Act. Accordingly the same is deleted." 4 ITA NO. 4186/ Del/2013

4. The Ld. AR submitted that the assessing officer issued notice

u/s 142(1) of the Act on 8.11.2010 fixing the date of 15.11.2010 and

on the fix date of hearing the assessee requested the AO to adjourn

the case of the Month of January, 2011 but the AO rejected the same

and completed the assessment proceedings by passing order dated

31.12.2010. The AR vehemently contended that in this situation it

cannot be held that the assessee did not comply with the notice dated

8.11.2010 of the AO and hence penalty u/s 271(1)(b) of the Act

cannot be imposed. The Ld. DR supported the orders of the

authorities below and submitted that when the assessee is not

cooperating with the assessment proceedings then the assessing

officer has no option but to comply assessment u/s 144 of the Act and

in this situation penalty u/s 271(1)(b) of the Act is leviable.

5. On careful consideration of above submission, we are of the

view that the assessing officer issued notice on 8.11.2010 fixing the

date 15.11.2010 and assessee by way of written application

requested for adjournment to January, 2011 it was dismissed and

the assessing officer pass the assessment order on 31.12.2010

under Section 144 of the Act.

5 ITA NO. 4186/ Del/2013

6. The DR has no dispute on this fact that the AR submitted an

application for adjournment on the fix date of hearing i.e. 15.11.2010.

Hence, it cannot be presumed that the assessee did not comply with

the notice of the AO u/s 142(1) of the Act. Under this facts and

circumstances, the assessee cannot be held guilty of non-complying

with the notice issued u/s 142(1) of the Act and penalty u/s 271(1)(b)

of the Act is not sustainable and the AOs directed to delete the

penalty. Accordingly sole ground of the assessee is allowed.

In the result, appeal of the assessee is allowed.

Order pronounced in open court on 27th February, 2015.

Sd/- Sd/- (N.K.Saini) (C.M.Garg) Accountant Member Judicial Member

Dated 27th Feb. 2015 B.Rukhaiyar Copy forwarded to 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. CIT (ITAT), New Delhi.

AR, ITAT N. Delhi 6 ITA NO. 4186/ Del/2013

Sl. Description Date No.

1. Date of dictation by the Author 25.02.2015

2. Draft placed before the Dictating 25.02.2015 Member

3. Draft placed before the Second Member

4. Draft approved by the Second Member

5. Date of approved order comes to the Sr. PS

6. Date of pronouncement of order

7. Date of file sent to the Bench Clerk

8. Date on which file goes to the Head Clerk

9. Date of dispatch of order 7 ITA NO. 4186/ Del/2013