Bhawana Bhalla, 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 13/05/2013 in appeal no. 51/ 2011-12 for AY 2009-10 by 2 ITA NO. 4184/ 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, ba din 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. 4237/ Del/ 2013 dated 20.6.2014 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 3 ITA NO. 4184/ Del/2013

comply with the notice and therefore penalty u/s 271(1)(b) was not justified. It was submitted under similar 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. 4184/ Del/2013

4. The Ld. AR submitted that the said notice u/s 143(2) and 142(1)

of the Act were not received by the asessee and therefore the

assessee could not attend the assessment proceedings. The AR

further contended that revenue authorities have not found that

despite of due service of notice the assessee remain absent without

any bona fide cause on the fixed date of hearing. The Ld. AR also

pointed out when any notice u/s 143(2) and 142(1) of the Act were

not received by the assessee then there was no question of non -

compliance and levying of penalty for non-compliance of that

unserved notice.

5. The Ld. DR supported the orders of the authorities below.

6. From the bare reading of the impugned order, we observe that

the assessing officer imposed penalty on the assessee for non-

compliance of the notice u/s 142(1) dated 16.11.2010 which was

actually issued on 19.11.2010 fixing the date 26.11.2010. From paper

book page no. 8, we also observe that the assessee requested for

adjournment for the Month of January, 2011 by filing an application

on 26. 11.2010 but the same was rejected by the AO and he passed

the assessment order u/s 144 of the Act on 31.12.2010. 5 ITA NO. 4184/ Del/2013

In this situation, it cannot be said that the assessee did not

response to the notice dated 16/19.11.2010 and hence penalty

cannot be imposed on the assessee u/s 271(1)(b) of the Act.

Accordingly main ground of the assessee is allowed and AOs

directed to delete the penalty.

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. 4184/ 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 26.02.2015 Member

4. Draft approved by the Second 26.02.2015 Member

5. Date of approved order comes to 26.02.2015 the Sr. PS

6. Date of pronouncement of order 27.02.2015

7. Date of file sent to the Bench 27.02.2015 Clerk

8. Date on which file goes to the Head Clerk

9. Date of dispatch of order 7 ITA NO. 4184/ Del/2013