JYOTI NAGPAL,NEW DELHI vs. ITO WARD 50(1), NEW DELHI

This appeal by the assessee is preferred against the order of the CIT(A)-17, New Delhi dated 13.05.2019 pertaining to A.Y. 2010-11.

The sum and substance of the grievance of the assessee is that the CIT(A) erred in law and on facts in sustaining the penalty of Rs. 50,000/- levied by the AO u/s. 271 (1) (b) of the Act. 3. The roots for the levy of penalty lie in the assessment order dated 12.12.2017 framed u/s. 144 of the Act. During the course of the scrutiny assessment proceedings the AO issued six notices on various dates but the assessee or his counsel did not attend the assessment proceedings which forced the AO to complete the assessment u/s. 144 of the Act.

The AO was convinced that the provisions of section 271 (1) (b) of the Act are attracted and levied penalty of Rs.60,000/- being 10,000 for each default. The assessee agitated the matter before the CIT(A) and the CIT(A) reduced the penalty and restricted the same of Rs.50,000/-.

Before us the Counsel for the assessee vehemently stated that since the assessee has changed its address the impugned notices were never received by the assessee and hence, the assessment proceedings remained unattended. The Counsel stated that the appeal before the CIT(A) was filed with the new address and, therefore, appellate proceedings were well attended. It is the say of the Counsel that change of address has been accepted as reasonable cause u/s. 273B for non compliance by assessee by this Tribunal in the case of Balram Kumar Mahendra Vs. ITO 21 taxmann.com 222 (Delhi).

Per contra the DR referring of para 6.3 of the order of the first appellate authority pointed out that the assessee never conveyed changed of address to the AO at any point of time and, therefore, the notices were sent to the address as per the e-filed return.

We have given a thoughtful consideration to the orders of the authorities below. It is true that the address in the assessment order and the penalty order is different from the address given in form 35 and in the order of the CIT(A). Even if the assessee has not conveyed the change of address to the AO in our considered opinion penalty u/s. 271( 1)(b) could not be imposed for each and every notice issued by the AO which remained not complied with on the part of the assessee since the default being the same in our humble opinion the penalty should be imposed for first default only. We accordingly direct the AO to levy penalty of Rs.10,000/- only. The appeal of the assessee is partly allowed.

Decision announced in the open court on 30.08.2022.