CHANDRIKABEN KANTILAL PATEL,GANDHINAGA vs. THE ITO, WARD-4, MEHSANA

Sole grievance of the assessee is that the ld.CIT(A) has erred in confirming penalty of Rs.10,000/- levied under section 271(1)(b) of the Act.

Brief facts of the case are that the AO got information from AIR wing exhibiting that the assessee has made cash deposit of Rs.12,36,500/- in saving bank account with AXIS Bank. He issued notice under section 148 on 2 27.3.2017. According to the AO, the assessee did not respond to the notice. Ultimately, assessment order was passed under section 144 of the Act. Since the assessee did not respond to the notice under section 142(1), the AO imposed penalty of Rs.10,000/-. Appeal to the CIT(A) did not bring any relief to the assessee.

The ld.counsel for the assessee contended that no notice was served upon the assessee, and that led the AO to pass assessment order under section 144 ex parte. Therefore, there should not be any penalty ought to be imposed upon the assessee for his failure to appear before the AO. On the other hand, the ld.DR relied upon the orders of the Revenue authorities.

On due consideration of the above facts, once it is pleaded that no notice was served upon the assessee, and the assessment order was passed ex parte, then, unless it is proved that notice was issued on the correct address upon the assessee, penalty ought not to be imposed. It is also pertinent to observe that there was change of address and on the new address notices were not sent. Therefore, there are plausible reasons for the assessee not to appear in response to the notice issued under section 142(1). We allow the appeal of the assessee, and delete penalty imposed upon him.

In the result, appeal of the assessee is allowed. Order pronounced in the Court on 29th July, 2019 at Ahmedabad.