The Tax Publishers2021 TaxPub(DT) 0476 (Ahd-Trib)

INCOME TAX ACT, 1961

Section 271(1)(b)

When an assessment was made under section 143(3) and not under section 144 subsequent compliance in the assessment proceedings was considered as good compliance so as to mitigate one single instance of default committed earlier, and ignored by AO while framing assessment under section 143(3), levy of penalty under section 271(1)(b) was not justifiable.

Penalty under section 271(1)(b) - Non-compliance with the notice issued under section 142(1) - Non-application of mind by AO while framing assessment -

The case of the assessee was selected for scrutiny assessment under section 143(2). After considering the details and explanations of the assessee, the assessment was finalized under section 143(3). However, in the meanwhile, penalty under section 271(1)(b) of the Act was initiated and levied an amount of penalty for non-compliance of Notice issued under section 142(1). This levy of penalty by AO under section 271(1)(b) was challenged before the first appellate authority, but got no relief. Held: In the assessment framed under section 143(3), assessee attended the hearing and submitted required details during the course of hearing, and based on the same, assessment was framed. When an assessment was made under section 143(3) and not under section 144 subsequent compliance in the assessment proceedings was considered as good compliance so as to mitigate one single instance of default committed earlier, and ignored by AO while framing assessment under section 143(3), levy of penalty under section 271(1)(b) was not justifiable. Therefore, there was no compelling reason to impose penalty under section 271(1)(b).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2013-14



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