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Income Tax Appellate Tribunal, JAIPUR BENCH ‘B’, JAIPUR
Before: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 1167/JP/2019
PER VIJAY PAL RAO, J.M. This appeal by the assessee is directed against the order 25.06.2019 of ld. CIT (A) arising from penalty levied under section 271(1)(b) of the I.T. Act for the assessment year 2010-11. None has appeared on behalf of the assessee when this appeal was called for hearing despite the notice issued through RPAD. However, the assessee has filed a letter dated 1st January, 2020 along with the written submissions and pleaded that the appeal of the assessee may be disposed off by considering the written submissions of the assessee. Accordingly the appeal of the assessee is taken up for hearing. The assessee has raised the following grounds of appeal :-
“ 1. That the notice issued u/s 274 r.w.s. 271(1)(b) and order imposing penalty of Rs. 40,000.00 by the assessing officer under said section are highly arbitrary, illegal and bad in law.
2. That in view of the facts and circumstances of the case the CIT (A) has erred in law and on facts in confirming the action of the AO and upheld the penalty of Rs. 40,000.00 u/s 271(1)(b) of the Act.
3. That Cit (A) has erred in not appreciating that the assessee has a reasonable cause of not appearing during the assessment proceedings as the assessee is a bank employee and on the transferable job and he was transferred from Alwar to Amroha (U.P) in the year 2017.
4. That the CIT (A) has failed to appreciate that the no notice was received or served on the assessee before initiation and completion of reassessment proceedings u/s 147 of the Act, as the assessee was transferred from Alwar to Amroha (UP), therefore, the assessment has been completed in ex-party.
5. That the CIT (A) has erred in law and on facts in non-quashing of penalty proceedings u/s 271(1)(b) which is wrongly initiated by the AO.
that in any case the penalty imposed is unjust, arbitrary and highly excessive.
That the appellant reserves its right to add, amend/modify the grounds of appeal.
The assessee is an Individual and not filed any return of income under section 139(1) of the IT Act. The AO issued notice under section 148 of the Act on 29th March, 2017. In response to the notice under section 148, the assessee has not filed any return of income. The AO issued notice under section 142(1) repeatedly for 4 times, but there was no response or compliance by the assessee. Finally, the AO has framed the assessment ex parte under section 144 read with section 147 of the IT Act whereby the total income of the assessee was assessed at Rs. 1,67,875/-.
Since there was a default on the part of the assessee for not complying with the notices issued by the AO under section 142(1), therefore, the AO initiated the proceedings under section 271(1)(b) of the Act and levied the penalty of Rs. 40,000/- @ Rs. 10,000/- for each default vide order dated 16.04.2018. The assessee challenged the action of the AO before the ld. CIT (A) but could not succeed.
The assessee has filed the written submissions. The assessee has explained the cause of non-compliance of the notices under section 142(1) due to the reason that the assessee is an employee of Indian Overseas Bank and was transferred from Alwar Branch to Amroha (UP) with effect from 03.08.2017. Thus the assessee has pleaded that the notices issued by the AO were not received by the assessee due to his transfer from Alwar to Amroha (UP).
On the other hand, the ld. D/R has submitted that the notices issued by the AO were prior to the transfer of the assessee and, therefore, except the last notice, earlier three notices were issued allegedly before transfer of the assessee. She has relied upon the orders of the authorities below.
We have considered the written submissions of the assessee as well as the arguments of the ld. D/R and carefully perused the impugned orders of the authorities below. There is no dispute that the assessee has neither filed any return of income nor appeared before the AO in response to the notice under section 148 as well as notices issued under section 142(1) of the Act. The AO has initiated the proceedings under section 271(1)(b) for non compliance of notices issued under section 142(1) of the Act. The details of the notices issued under section 142(1) as reproduced by the AO in para 1 of the penalty order are as under :-
Notice u/s Date of Issue Date of hearing Remarks 142(1) 29.06.2017 11.07.2017 Non-complied 142(1) 12.07.2017 19.07.2017 Non-complied 142(1) 25.07.2017 10.08.2017 Non-complied 142(1) 11.08.2017 22.08.2017 Non-complied In the assessment order, the AO has stated that a notice under section 142(1) along with the query letter was issued on 29.06.2017. Since there was no compliance by the assessee to the said notice, therefore, again a notice under section 142(1) was issued on 12th July, 2017. Similarly, the AO again issued two more notices under section 142(1) on 25.07.2017 and 11.08.2017. All these notices under section 142(1) were issued by the AO seeking the same information from the assessee, therefore, once the assessee has committed a default of non-compliance of the information sought by the AO then issuing repeated notices by the AO seeking same information would not multiply the default. Therefore, even if the AO issued 4 notices under section 142(1) but the information sought in all these notices was the same, then it would constitute only one default. As regards the explanation of the assessee for explaining the cause of non-compliance, we find that except the last notice dated 11.08.2017, the earlier 3 notices issued by the AO under section 142(1) were issued prior to the date of alleged transfer on 03.08.2017. Therefore, the said explanation of the assessee is without any substance or merits. Hence, in the facts and circumstances of the case, we restrict the penalty levied under section 271(1)(b) of the Act to one default as against 4 defaults treated by the AO. Accordingly, the 5 Shri Sandeep Verma, Ghaziabad. penalty under section 271(1)(b) of the I.T. Act is confirmed to the extent of Rs. 10,000/-. 6. In the result, appeal of the assessee is partly allowed.