DhruvFurnitures Private Limited vs ITO, Ward-1(1)

PER ANUBHAV SHARMA, JM:

This appeal is preferred by the assessee against the order dated 04.12.2025 of the Ld. National Faceless Appeal Centre (NFAC) Delhi (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in DIN & Order No.: ITBA/NFAC/S/250/2025-26/1083325683(1) arising out of the order dated 30.05.2019 u/s 271(1)(b) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by the ITO, Ward-1(2) for AY: 2016-17. The levy of penalty of Rs. 10,000/- is sustained by the ld. CIT(A).

On hearing both sides we find that at page 1-2assessee has provided copy of notice u/s 142(1) of the Act dated 04.10.2018 which has given rise to levy of penalty and wherein it is mentioned that assessee was called upon to “please furnish the balance information as already called for vide this office notice dated 02.07.2018”.

As we appreciate the assessment order we find that assessing officer mentions that after notice u/s 143(2) issued on 08.08.2017 thereafter notice u/s 142(1) was issued on 02.07.2018 along with a questionnaire for 13.07.2018. Assessing officer mentions in the assessment order that in responseassessee filed reply through e-filing portal on 28.08.2018. Thereafter aimpugned notice was issued on 04.10.2018 for making compliance before 10.10.2018 but allegedly no compliance was made by the assessee. Again notice u/s 142(1) was issued on 08.11.2018 for compliance up to 14.11.2018 and on 19.11.2018 assessee company had submitted reply along with all relevant evidences.

Nowhere in the assessment order assessing officer has made any observation that there was any non-compliance of a notice dated 04.10.2018 for which penalty proceedings u/s 271(1)(b) of the Act is being initiated. Assessee made compliances of the first notice dated 02.07.2018 submitting copy of ITR, profit and loss account, balance sheet and other annexures. Therefore, when impugned notice dated 04.10.2018 was issued and assessee was called upon to comply as per earlier notice dated 2.07.2018, the notice and query became ambiguous. The Assessee had already complied the notice dated 02.07.2018 and the fact is reflected in the assessment order. Thus, we find that there was no non-compliance requiring issuance of notice u/s 271(1)(b) of the Act and consequential penalty proceedings and the impugned order dated 30.05.2019 are not sustainable under law.

Accordingly, ground raised are sustained and appeal is allowed. The impugned penalty levied by the Learned Assessing Officer stands quashed.