RAMASAMY THANGAVEL,KARUR vs. DCIT NON CORP 19(1), CHENNAI

Briefly stated facts are that the appellant is an individual. No regular return of income for the assessment year 2015-16 was filed by the appellant. However, based on the information that appellant sold two immovable properties for a total consideration of Rs.1,25,26,955/-, the jurisdictional AO formed opinion that income escaped assessment from tax. Accordingly, notice u/s.148 of the Act was issued on 12.04.2022 after duly complying with the procedure laid down u/s.148A of the Act. The appellant neither complied with the notice u/s.148 of the Act nor notice u/s.142(1) of the Act. In the circumstances, the e-assessment unit of the Department (hereinafter the ‘AO’) proceeded making best judgment assessment vide order dated 04.03.2024 passed u/s.147 r.w.s.144 r.w.s.144B of the Act at a total income of Rs.1,25,26,955/-. The AO also initiated penalty proceedings u/s.271(1)(b) of the Act for non-compliance of notices issued u/s.142(1) of the Act vide show-cause notice dated 02.02.2024. In response to show-cause notice, the appellant has not filed any response. In the circumstances, the AO had proceeded with levy of penalty of Rs.20,000/- u/s.271(1)(b) of the Act vide order dated 24.04.2024. Being aggrieved by the above order, an appeal was filed before the CIT(A) contending that the appellant could not comply with the notices u/s.142(1) of the Act for the reason that the notice issued u/s.142(1) of the Act was served on the old address.

Being aggrieved, the appellant is in appeal before us. It is contended that the notice issued u/s.142(1) of the Act was dispatched to the old address whereas the assessment order dated 04.03.2024 passed u/s.147 r.w.s.144 r.w.s.144B of the Act was served on the new address. Since the notice went to the old address, the appellant could not comply to the notice issued u/s.142(1) of the Act. This constitutes reasonable cause for non-compliance of the notices.

On the other hand, the Ld.Senior DR placing reliance on the orders of the lower authorities submits that the appellant had failed to show any substantial reason for non-compliance of notice u/s.142(1) of the Act and the AO has rightly levied penalty.

We have heard rival submissions and perused the material on record. The issue that arises for our consideration is whether the CIT(A) was justified in confirming the levy of penalty of Rs.20,000/- u/s.271(1)(b) of the Act. The AO had levied penalty u/s.271(1)(b) of the Act for non-compliance of notice u/s.142(1) of the Act. We also find from the material on record that even the assessment order was passed ex-parte. It is the contention of the appellant that notice

In the result, the appeal filed by the assessee is allowed.