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Income Tax Appellate Tribunal, DELHI “SMC” BENCH: NEW DELHI
Before: SHRI KUL BHARAT
ORDER
PER KUL BHARAT, JM :
The present appeal filed by the assessee for the assessment year 2011-12 is directed against the order of Ld. CIT(A), National Faceless Appeal Centre (“NFAC”), Delhi dated 09.09.2021. The assessee has raised following grounds of appeal:- 1. “That A.O. as well CIT(A) ignore the facts that the assessee have living address Sh. Ashwini Sharma, 22, Village Salrpur Jalalpur, Meerut 250002, Uttar Pradesh.
2. That the assessee has right to add, modify or delete any ground during the appeal proceedings.”
At the time of hearing, no one attended the proceedings on behalf of the assessee. It is seen from the records that no one has been attending the proceedings since 26.07.2022. The notices sent through speed post were returned back unserved by the Postal Authority with the remark “not met”. Under these facts, the appeal is taken up for hearing in the absence of the assessee and is being disposed off on the basis of material available on record.
Facts giving rise to the present appeal are that during the assessment proceedings, the Assessing Officer (“AO”) issued notices u/s 142(1) of the Income Tax Act, 1961 (“the Act”) dated 25.07.2018, 14.09.2018 and notice u/s 144 of the Act dated 26.10.2018 to the assessee. The AO observed that there was no compliance hence, he initiated penalty proceedings u/s 271(1)(b) of the Act. In response to the notices, Ld. Counsel for the assessee appeared before the AO. The response of the assessee was not found acceptable and satisfactory to the AO. Therefore, he imposed the impugned penalty u/s 271(1)(b) of the Act to the assessee.
Aggrieved against the order of AO, the assessee preferred appeal before Ld.CIT(A), who after considering the submissions, sustained the addition and dismissed the appeal of the assessee.
Aggrieved against the order of Ld.CIT(A), the assessee preferred appeal before the Tribunal.
It is transpired from records that written submissions have been filed on behalf of the assessee by his Ld. Authorized Representative (“AR”). The relevant contents of the written submissions are reproduced as under:-
“Hon'ble Sir, It is submitted that in the above case, the assessee has received notice for the A.Y. 2011-12, fixing the date of hearing on 15-02-2023. In brief, facts of the case are as under:
Facts of the Case: That during the assessment year, the A.O. stated that he has issued notice U/s 142(1) of I.T. Act 1961 as under: (i) 142(1) dated 25-07-2018 (ii) 142(1) dated 14-09-2018 Both the notices were sent through speed post. The assessee is living in Meerut but he went to the Village - Salarpur, Jalalpur, Meerut occasionally. The service of speed post is very poor and it is not served upon the assessee. Hence, without service of notice is against the principal of natural justice. The A.O. has imposed the penalty U/s 271 (1 )(b) of Rs. 10,000/-, the assessee has not accept the order passed by A.O. and filed an appeal before CIT(A), who dismissed the appeal of the assessee. Now the assessee is in appeal before Hon'ble ITAT by taking following grounds of appeal: GROUNDS OF APPEAL
1. That A.C. as well as CIT(A) ignore the facts that the assessee have living in new address Sh. Ashwini Sharma, 22, Village Salarpur Jalalpur, Meerut 250002, Uttar Pradesh.
2. That the assessee has right to add, modify or delete any ground during the appeal proceeding. A.O. Observation: Even this notice is contradictory to the observation in assessment order, last para of which is as under:- With reference to the above-mentioned subject it is brought to your kind notice that during the course of assessment proceedings for the AY 2011-12, penalty notice dated 26.10.2018 u/s 271 (1)(b) was issued to you for non-compliance of notice u/s 142(1) dated 14.09.2018. You were required to show cause as to why an order imposing penalty u/s 271(1)(b) on you should not be made. You are required to furnish your reply on 08.11.2018. But no reply has been received from you. You are therefore, given one more opportunity to show cause in writing either personally or through your duly authority representative as to Page | 3 why the penalty of Rs. 10,000/- u/s 271(1)(b) for non-compliance of notice u/s 142(1) dated 14-09-2018 should not be imposed upon you. CIT(A) Finding: I have gone through the facts of the case and circumstances of the case. It is noted that the A.O. initiated penalty proceedings u/s 271(1)(b) of the Act for non-compliance of the statutory notices issued by the A.O. on different dates. The show cause issued by the A.O. was also remained un-complied with. Thereafter, the A.O. imposed a penalty u/s 271(1)(b) of the Act of Rs. 10,000/-. During the appellate proceedings, the AR of the appellant has submitted that he is living in Village - Salarpur, Jalalpur, Meerut. the service of speed post is very poor and it is not served upon the assessee, therefore, he could not comply with these notices. After considering the facts and circumstances of the case, I find that the explanation given by the appellant is not tenable/acceptable as all the notices were sent to the same address of Village Salarpur, Jalalpur, Meerut and non of these notices were returned undelivered by the postal authorities. Even the assessment order and all the post assessment communications addressed to the same address, had been served upon the appellant and no receipt of the assessment order, the appellant had filed appeal against the order. Therefore, the contention of the appellant that he has not received any notice issued u/s 142(1) of the Act is not acceptable. Hence, the action of the A.O. for levying penalty u/s 271(1)(b) of the act for non-compliance of the statutory notice is justifiable and penalty of Rs. 10,000/- is hereby sustained. Assessee's Submission: The proceeding on earlier date is contradictory to assessment order when no notice was received. Therefore, initiation of penalty is bad in law in view of Hon'ble LTAT. Order in the case of Sh. Zafar Alam Vs. ITO Ward-1(1), Meerut vide In which, Hon'ble ITAT., New Delhi held as under: In view of what has been discussed above, we are of the considered view that when the Revenue has failed to prove the service of notice upon the assessee, question of levying the penalty u/s 271(1)(b) does not arise, hence, penalty levied u/s 271(1)(b) is ordered to be deleted. Consequently, this appeal being filed by the assessee is allowed. Similarly, in the case of Sh. Wahabuddin Vs. I.T.O., Ward-2(4), Meerut in ITA No. 4177/Del/2016, in which, Hon'ble ITAT. New Delhi held as under: We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is noticed that the AO did not levy the penalty for the notices issued u/s 142(1) of the Act on 15.05.2014 and 14.08.2014. The ~ penalty u/s 271 (1 )(b) of the Act has been levied for the failure to comply the notices dated 02.09.2014. The assessee explained before the Id. CIT(A) that on the said date, he was not at home and there was no authorized person to take the notice. The said explanation of the assessee had not been considered by the Id. CIT(A), it is also not the case of the Id. CIT(A) that the said statement was false. We, therefore, considering the totality of the facts, are of the view that when the assessee was not present at home and had not received the notice, there was no occasion to refuse to receive the notice. In that view of the matter, we are of the view that the penalties levied by the AO and sustained by the Id. CIT(A) ITA Nos. 4177 & 4178/Del/2016 Wahabuddin 4 for the assessment years 2011-12 and 2012-13 u/s 271(1)(b) of the Act are not sustainable. Accordingly, the same are deleted. Copies of Orders are being enclosed herewith. Considering the facts and case laws quoted by the assessee, it is therefore, requested you to kindly file the proceedings and oblige.”
7. On the other hand, Ld. Sr. DR opposed these submissions and supported the orders of the authorities below. He submitted that there is a deliberate non- compliance by the assessee in respect of the notices issued by the AO. The reasons for non-attendance/non-compliance of the notices is ex facie, contrary to the records, he therefore, submitted that the impugned penalty may be sustained. He further submitted that case laws as relied by the assessee in its written Page | 5 submissions, are on different set of facts. The assessee deliberately did not attend the proceedings despite various notices issued by the AO.
8. I have heard Ld. Sr. DR for the Revenue and perused the material available on record. The only explanation given by the assessee is that both the notices dated 25.07.2018 and 14.09.2018 were sent by the speed post and it was not served upon the assessee. Hence, without service of notice, the penalty ought not to have been imposed. The contention of the assessee is that he has not received notices of hearing but the assessee himself stated that the notices were sent through speed post. The AO in para 5 has observed as under:-
5. “In this case the notice u/s 148 was issued on 28.03.2019 which was sent through speed post vide no, EU161301545IN which was not returned unserved. Notice u/s 142(1) dated 25.07,2019 was sent vide speed post no. EU3144 14155 IN. Thereafter notice u/s 142(1) dated 14.09,2019 was sent vide speed post no. EU428687041 IN. Penalty notice U/S 271(l)(b) and show cause notice u/s 144 dated 26.10.2018 were sent vide speed post no. EU473350153. It is worthwhile to mention here that all the above notices were sent to the same address of Village Salarpur, Jalalpur, Meerut and none of the notices was returned undelivered by the postal authorities. Even the assessment order along with the notice of demand and penalty notice and all the post assessment communications addressed to the same address have been served upon the assessee. On receipt of the assessment order the assessee has filed appeal against the order. Therefore, the contention of the assessee that no notice was received by him, is not tenable.” 9. The above finding of the AO is not rebutted by the assessee. Therefore, I do not see any reason to interfere in the findings of Ld.CIT(A), the same is hereby affirmed. The case laws as relied by the assessee are distinguishable on facts. Grounds raised by the assessee in this appeal are hence, dismissed.
In the result, the appeal of the assessee is dismissed.