INCOME TAX ACT, 1961

Section 271(1)(b)

Penalty under section 271(1)(b) - Leviability - AO alleged non-compliance to notices issued under section 142(1) - Assessment was duly completed under section 143(3)

Due to materials/documents belonging to the assessee, found and seized in the course of search and seizure action under section 132, at premises of M/s. SDS Group of Companies (other assessee), proceedings under section 153C were initiated in case of assessee by way of issue of notice under section 153C. In response, the assessee filed return of income. During assessment proceedings AO issued notice under section 142(1). According to AO no sufficient compliance of these notices were made by assessee, however, subsequently assessee appeared and filed details and assessment was accordingly completed under section 153C read with section 143(3). AO issued notice under section 271(1)(b) read with section 274 and thus levied penalty for default of noncompliance by assessee of notices issued under section 142(1). Assessee, submitted that first notice under section 142(1) was issued on 11-12-2014 and on said date, counsel of the assessee attended and matter was adjourned to 7-1-2015. In the meantime, AO issued one more notice under section 142(1) on 2-1-2015 which according to AO had not been complied with. The third notice was issued on 16-1-2015, and in response to the same, assessee filed copy of acknowledgement of IT return and thus partial compliance was made. He further submitted that subsequently, Shri Pradeep Jain, Chairman of Parsvnath Group of companies attended the proceeding on 18-3-2015 and his statement was duly recorded and all the informations sought by AO were duly filed. The assessment was completed under section 143(3) by AO. Held: The fact that assessment had been competed under section 143(3) was not in dispute. Since assessee had furnished requisite details for completion of assessment by compliance of statutory notices issued by AO and the assessment has been completed under section 143(3), therefore, under these facts and circumstances it was not a fit case for levy of penalty under section 271(1)(b).

Followed:Logicladder Tech Pvt. Ltd. v. ITO ITA No. 4262/Del/2018 (Del.-Trib), Globus Infocom Ltd. v. DCIT, ITA No. 738/Del/2014; (Del-Trib) Akhil Bhartiya Prathmik Shmshak Sangh Bhawan Trust v. Asstt. DIT, (2008) 115 TTJ 419 (Del-Trib) : 2008 TaxPub(DT) 882 (Del-Trib)