‘Non-Cooperative Attitude’ Cannot Be The Basis Of Imposing Penalty: ITAT

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that a ‘non-cooperative attitude’ as such in itself cannot be the basis for imposing penalties without specifically bringing on record the specific notices and their specific non-compliances.

The bench of Anubha V Sharma (Judicial Member) and N.K. Billaiya (Accountant Member) has observed that unless it is established in the assessment order or even under the penalty order that at the time of the assessment proceedings itself, AO had formed the opinion that there was intentional non-compliance justifying issuing notice under Section 271(1)(d) or under Section 272A(1)(d) of the Income Tax Act, AO was not justified in levying a penalty.

The appellant or assessee challenged the penalty order under Section 272A(1)(d) of the Income Tax Act. The assessee pointed out that in response to the notice under Section 153(C) of the Income Tax Act, the returns were filed and the assessments were completed with no demand in FY 2011–12.

The assessee contended that penalty orders have been passed without application of mind as the orders do not disclose as to which notice was not complied with.

The tribunal noted that the penalty order does not mention which notice and under what provisions of the law was issued, how served, or which was not responded to by the assessee. As a matter of fact, the assessments have been completed under Section 153C of the Act, and no adverse inference was drawn against the assessee to pass an order on a best-judgment basis under Section 144C.

The ITAT set aside the penalty orders as the assessments were completed under section 153C and not under section 144 and the AO had imposed penalties without specifically bringing on record the specific notices, their specific non-compliances and the satisfaction that there has been a non-compliance.

Case Title: Alankit Imaginations Ltd. Versus DCIT

Case No.: ITA No. 895 to 900/Del/2023

Date: 13.09.2023

Counsel For Appellant: Sumit Lalchandhani

Counsel For Respondent: Kanv Bali

Click Here To Read The Order