No penalty u/s 271(1)(b) where the assessment is completed u/s 143(3)

The issue in this appeal of the assessee is regard to the confirmation of levy of penalty u/s 271(1)(b) of The Income Tax Act, 1961 (The Act) by the CIT(A).

In this matter, the assessee did not appear before the ld. AO on 29/05/2018 being the scheduled date of hearing. However, on 30/05/2018, the assessee had duly appeared and submitted the relevant papers physically before the ld. AO. However, the ld. AO proceeded to levy penalty u/s.271(1)(b) of the Act for non-compliance on the scheduled date of hearing and levied penalty of Rs.10,000/- thereon vide order u/s.271(1)(b) of the Act dated 13/05/2019. This penalty was upheld by the ld. CIT(A).

Before the tribunal, the assessee had explained that the authorised representative was in Jalgaon on 29/05/2018 in connection with an audit assignment and accordingly, was not able to attend to the hearing on 29/05/2018. However, we find that assessee through its authorised representative had ensured presence before the ld. AO on 30/05/2018, 15/09/2018, 03/10/2018, 09/10/2018 and 17/10/2018 by furnishing the requisite details called for from time to time. Ultimately, the assessment was completed by the ld. AO u/s.143(3) of the Act only. When an assessment has been completed u/s.143(3) of the Act, it goes to prove that there was sufficient compliance by the assessee by furnishing the requisite details before the ld. AO and that the ld. AO had indeed condoned the absence of the assessee on earlier occasion. Hence, this is not a fit case for levy of penalty u/s.271(1)(b) of the Act. It direct the ld. AO to delete the said penalty. Accordingly, the grounds raised by the assessee are allowed.

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