Levy of Penalty u/s.271(1)(b) of the Income Tax Act

This case concerns appeals against a penalty of Rs. 10,000 levied under Section 271(1)(b) of the Income Tax Act for failing to attend a hearing. The appeals were dismissed by the CIT(Appeal) as the grounds didn't relate to the penalty. The Tribunal noted the assessee failed to attend hearings and provide a reasonable cause, but acknowledged the Income Tax Act as welfare legislation and aimed to provide an opportunity for the assessee to present their case.

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, PUNE

(Through Virtual Court)

BEFORE SHRI R.S.SYAL, VP AND
SHRI PARTHA SARATHI CHAUDHURY, JM

ITA Nos. 692, 693 & 694/PUN/2018
Assessment Year : 2008-09

Pradip Maruti Powar
2073, 13th Lane,
Rajarampuri, Kolhapur,
PAN : AJAPP8749E
Appellant

 V/s.

The Income Tax Officer,
Ward-2(2), Kolhapur.
 Respondent

Assessee by : None
Revenue by : Shri Sudhendu Das

Date of Hearing : 01.07.2021
Date of Pronouncement : 01.07.2021

 ORDER

PER PARTHA SARATHI CHAUDHURY, JM:

These three appeals preferred by the common assessee emanate from the common order of the Ld. CIT(Appeal)-2, Kolhapur dated 11.01.2018 for the assessment year 2008-09 as per the following common grounds of appeal on record : 

“1. On the facts and in the circumstances of the case and in law the penalty levied of Rs.10,000/- in each of the appeals is not justified considering the facts of the case and reasonable cause for nonattendance by the assessee. The penalty levied be quashed.

2. The appellant craves to leave, add/amend or alter any of the above grounds of appeal.”

2. The only grievance raised in all these appeals is with regard to levy of penalty of Rs.10,000/- in each of the appeals u/s.271(1)(b) of the Income Tax Act, 1961 ( hereinafter referred to as „the Act‟).

3. At the time of the hearing, neither the assessee nor his authorized representative was present. The submissions of the Ld. DR was recorded and the cases were considered on merits.

4. That on perusal of the order of the Ld. CIT(Appeal) in respect of all these appeals, it is observed that he has not dealt with the merits of the case since before him the grounds of appeals raised by the assessee as enclosed inForm-35 pertained to quantum addition issues but not in respect of the levy of penalty u/s.271(1)(b) of the Act. Since the grounds of appeal did not emanate from penalty orders, the Ld. CIT(Appeal) had dismissed them inline. That, therefore, the Ld. CIT(Appeal) has not adjudicated upon the rights and liabilities of the parties herein. We also observe that the assessee who was served notice u/s.142(1) of the Act by the Assessing Officer requesting him to attend the hearing, there was no response from the assessee and he had failed to attend the same. The assessee had also not provided any reasonable cause before the Revenue Authorities for such noncompliance. That, however, we always consider the fact that Income Tax Act is welfare legislation and not penal legislation. Therefore, as far as possible opportunity should be given to the assessee to represent his case on merits before the Quasi-Judicial Authorities.

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