RAJINDER KUMAR,NEW DELHI vs. ITO, WARD-49(3), NEW DELHI

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ITA 7500/DEL/2019Status: DisposedITAT Delhi23 June 2022AY 2010-115 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since no notice under Section 271B read with Section 274 was issued to the assessee, the penalty order was without jurisdiction and liable to be quashed.

What were the facts?

The Assessing Officer (AO) made an ex-parte assessment order for AY 2010-11, adding cash deposits and a percentage of bank credits to the assessee's income. A penalty under Section 271B was levied for not auditing accounts, which the CIT(A) upheld.

What were the issues?

The key issue was whether the penalty under Section 271B was validly imposed without issuing a proper notice to the assessee.

Which sections of the Income-tax Act were involved?

Section 271B,Section 274,Section 144,Section 147,Section 44AB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES “SMC” : DELHI

Before: SHRI ANIL CHATURVEDI

Hearing: 14.06.2022Pronounced: 23.06.2022

This appeal filed by the Assessee has been directed against the order of the Ld. CIT(A)-17, New Delhi, dated 22.07.2019 relating to the A.Y. 2010-2011.

2.

The relevant facts as culled out from the material on record are as under :

2.1. The assessee is an individual. The A.O. has noted that assessee had not filed any return of income for the A.Y.

2 ITA.No.7500/Del./2019 Sh Rajinder Kumar, New Delhi. 2011-12. The case was reopened and notice under section 148 dated 30.03.2017 was issued. Thereafter, various notices under section 142(1) were issued and served on the assessee, but, there was no compliance of the same. The A.O. thereafter passed the ex-parte assessment order under section 144 read with Section 147 dated 27.12.2017 determining the total income at Rs.13,46,336/- by inter alia making addition of Rs.11,13,706/- being the cash deposits in his bank account and addition of Rs.2,32,630/- being 5% of the aggregate bank credits amounting to Rs.46,52,604/-. The A.O. thereafter passed penalty order under section 271B wherein he levied penalty of Rs.23,263/- by holding that the bank credit of Rs.46,52,604/- in the assessee’s bank account to be the total turnover which had exceeded the mandatory limit to get the books of accounts audited under section 44AB of the I.T. Act, 1961. He, therefore, held that since had failed to get his accounts audited, the assessee was liable for penalty under section 271B of the I.T. Act, 1961. He, accordingly levied the penalty.

3 ITA.No.7500/Del./2019 Sh Rajinder Kumar, New Delhi. 2.2. Aggrieved by the order of the A.O. assessee carried the matter before the Ld. CIT(A) who vide order dated 22.07.2019 in Appeal No.10085/2018-19 upheld the action of A.O.

3.

Aggrieved by order of Ld. CIT(A), the assessee is now in appeal before the Tribunal and has raised several grounds. The sole controversy raised by the assessee in its grounds of appeal are that no penalty notice were served upon the assessee.

4.

On the date of hearing, none appeared on behalf of the assessee despite notice of hearing that was issued several times. We, therefore, proceed to dispose of the appeal ex-parte qua the assessee, after hearing the Ld. D.R.

5.

Before us, at the outset, Ld. D.R. submitted that at the time of last hearing i.e., on 16.12.2021 the Revenue was directed to place on record the report as to whether notice under section 271B of the I.T. Act, 1961 was issued and served on the assessee. The Ld. D.R. placed on record the copy of the letter dated 31.01.2022 vide F.No.ITO/Ward-

4 ITA.No.7500/Del./2019 Sh Rajinder Kumar, New Delhi. 49(1)/Misc/2021-22/816 wherein the A.O. has stated that no notice under section 271B read with section 274 of the I.T. Act, 1961 dated 27.12.2017 was issued to the assessee. He, therefore, submitted that considering the aforesaid letter of the A.O. appropriate orders be passed.

6.

I have heard the Ld. D.R. and perused the material available on record. The issue in the present appeal is with respect to levy of penalty under section 271B of the I.T. Act, 1961. Since, no notice was issued and served on the assessee as admitted by the A.O. vide letter dated 31.01.2022 (supra), the purported penalty order dated NIL under section 271B made consequent thereto was without jurisdiction and liable to be quashed. Thus, the grounds of the appeal of the assessee are allowed.

7.

In the result, appeal of the assessee is allowed.

Order pronounced in the open court on 23.06.2022.

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