SHABANA PARVEZ MALIM ,MUMBAI vs. ITO WARD 31(2)(1), MUMBAI

PDF · subscribers
ITA 3759/MUM/2025Status: DisposedITAT Mumbai05 August 2025AY 2015-16Bench: SHRI VIKRAM SINGH YADAV (Accountant Member), SHRI SANDEEP GOSAIN (Judicial Member)7 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal acknowledged the assessee's explanation regarding her lack of technical proficiency and her husband's overseas presence. However, it found a lack of diligence. While upholding the penalty, the Tribunal restricted its levy to Rs. 10,000.

What were the facts?

The assessee, a housewife, failed to comply with notices issued by the AO under section 142(1) during assessment proceedings for AY 2015-16. The AO imposed a penalty under section 271(1)(b) for this non-compliance.

What were the issues?

Whether the penalty for non-compliance to notices issued under section 142(1) is sustainable when the assessee claims lack of technical proficiency and her husband's absence, and whether the penalty amount can be restricted.

Which sections of the Income-tax Act were involved?

Section 142(1),Section 271(1)(b),Section 147,Section 144B,Section 250,Section 139(1),Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI “G” BENCH : MUMBAI

Before: SHRI VIKRAM SINGH YADAV & SHRI SANDEEP GOSAIN

For Appellant: Shri Mohd. Shahabkhan
For Respondent: Shri Swapnil Choudhary

O R D E R PER VIKRAM SINGH YADAV, A.M : This is an appeal filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [„Ld.CIT(A)‟], dated 03-04-2025, pertaining to Assessment Year (AY) 2015-16, wherein the Ld.CIT(A) has sustained the levy of penalty u/s. 271(1)(b) of the Income Tax Act, 1961 („the Act‟) on account of non- compliance to the notices issued u/s 142(1) of the Act during the course of assessment proceedings.

2.

During the course of hearing, the Ld.AR submitted that the assessee is a house wife and provide tuitions to school kids and not technically proficient with computers. It was submitted that her tax returns and related tax matter were taken care of by her husband, who works in New Zealand and as a reason, the notices so issued by the AO could not be complied with as the assessee‟s husband email id has been provided. It was further submitted that the quantum proceedings have been set-aside by the ld CIT(A) to the file of the AO and since the outcome of the said proceedings will have a bearing on the present penalty matter and the matter may be set-aside to the file of the AO. Further, reliance was placed on the written submissions and the contents thereof read as under: “3.1 The Appellant is an Individual Resident Indian having PAN: BPXPM9611Q, regularly assessed to Income Tax since A.Y. 2021-22. She is a housewife and also provides tuition to school kids earning a minimal income from said Tuition and from Bank Interest. She lives in India at the aforementioned address. Whereas, her husband is an Overseas Citizen of India (OCI) whose occupation is Senior Quantity Surveyor aboard a Merchant Ship since 2007. Furthermore, he was working in Dubai in Leighton Offshore PTE LT as a Cost Control Manager. He was employed in the said Company in Dubai from 13/04/2014 to 09/10/2014. Whereas, November 2014 onwards he got employed in India in Mace International Company as a Senior Commercial Manager for Oberoi Realty Project. He acquired New Zealand Citizenship and New Zealand Passport on 19/01/2016. (OCI copy and New Zealand Passport Copy attached). 3.2 Your Honor, the Appellant humbly submits that the Ld. AO has passed the main quantum Impugned Assessment Order U/s 147 rws 144B of the Act dated 26-03-2024, for which your Appellant has already filed an appeal in Form 35 vide Ack No. 181422440200424 dated 20-04-2024. 3.3. The said Quantum Appeal has been decided by the Ld CIT(A) and vide Order U/s 250 dated 03/04/2025 vide DIN ITBA/NFAC/S/250/2025- 26/1075434275(1), the Quantum Matter has been set aside and restored back to the file of AO for making a fresh assessment., thereby allowing the Appeal filed by the Appellant for Statistical Purposes. (Para 5.3 of the CIT(A) Quantum Order U/s 250). 4. The Appellant also humbly submits to Your Honor, that the Ld. FAO had issued the following Notices U/s 274 rws 271(1)(b) of the Income Tax Act:-

Dated 26-03-2024 vide DIN ITBA/PNL/F/271(1)(b)/2023- 24/1063408913(1) response to which was given by the Appellant vide Ack 184733681230424 dated 23-04-2024 Dated 29-04-2024 vide DIN ITBA/PNL/F/271(1)(b)/2024- 25/1064418545(1) response to which was given by the Appellant vide Ack 197222321020524 dated 02-05-2024 4.1.1. Your Honor, the Appellant had submitted to both the Notices U/s 271(1)(b) requesting the Ld FAO to kindly keep the Penalty Proceeding U/s 271(1)(b) in abeyance till the disposal of the main quantum Appeal which was filed (refer supra 2.) 5. The Ld CIT(A) during in the Order U/s 250 dated 03/04/2025 at Para 5.2. reiterated for easier reference as follows:- "5.2. During the appeal proceedings, the appellant stated that the appellant having meager income and less than the statutorily required income for filing ITR u/s. 139(1) and being technically not proficient with computers and having minimal knowledge of the workings and proceedings of a scrutiny or penalty proceeding was not aware or informed of giving reply to the notices issued by the Ld. FAO u's. 142(1) dated 05.04.2023, 27.12.2023 and 28.02.2024 During the appeal proceedings, the appellant stated that she is not technically proficient with computers and minimal knowledge of scrutiny/penalty proceedings which caused non-compliance. Further, her husband was also not in India and working in abroad. However, the appellant did not agitate on the issue and service of notices. The appellant had not submitted or responded to the notices but only requested for adjournments. It is for the appellant to respond to the statutory notices uw/s. 142(1) issued by the AO during the assessment proceedings. In the absence of any reasonable cause for noncompliance to the notice u/s. 142(1), the action of the AO in imposing penalty u/s. 271(1)(b) is upheld and the appeal of the appellant is dismissed." 5.1. Your Honors, the Appellant humbly submits that during the Appeal Proceedings with the Ld CIT(A) the Appellant made the following submissions:- "The Appellant humbly submits to the Hon'ble CIT(A) that the Appellant has a meager source of income. Whereas, her husband Mr. Parvez Malim (OCI) whose occupation was a Senior Quantity Surveyor aboard a Merchant Ship since 2007. During A.Y. 2015-16/F.Y. 2014-15 he was working in Dubai in Leighton Offshore PTE LT as a Cost Control Manager. He was employed in the said Company in Dubai from 13/04/2014 to 09/10/2014. Whereas, November 2014 onwards he got employed in India in Mace International

Company as a Senior Commercial Manager for Oberoi Realty Project, earning substantially more and provides for the Appellant and their Son Master Zimraan Parvez Malim. The Husband periodically sent money to the Appellant's Bank A/c and to the Appellant & their Son's Joint Bank A/c, both of which was held with Standard Chartered Bank Andheri (W), Mumbai Branch, for their maintenance and sustenance. Furthermore, the husband Mr Parvez Malim had made the total payment towards cost of the flat directly from his own A/c and through the Appellant's Bank A/c by transferring funds to the Appellant's Bank Account. The said Residential Flat was purchased vide Registered Agreement of Sale dated 09/04/2014. The said Flat was registered in the name of the Appellant and the Appelant's husband Mr Parvez Malim. Mr. Parvez Malim included the Appellant's name in the Agreement for sale out of natural love and affection and out of a duty towards providing for his wife." "The Appellant having meager income and less than the statutorily required income for filing an ITR U/s 139(1), and being technically not proficient with Computers and having minimal knowledge of the workings and proceedings of a Scrutiny or Penalty proceeding was not aware or informed of giving a reply to the Notices issued by the Ld FAO U/s 142(1) dated 05.04.2023, 27.12.2023 & 28.02.2024. Furthermore, her husband also was not in India at the time these notices were issued. (Computation of days in India Sheet with Arrival & Departure Stamps attached)." Furthermore, Your Honor, the Appellant humbly submits that she does not understand the nuances and intricacies of the Scrutiny Proceedings and Penalty Proceedings envisaged in the Income Tax Act, 1961. Due to which she was unaware of the Order U/s 271(1)(b) issued by the Ld FAO dated 20-09-2024. However, her husband who resides in New Zealand whose email id is submitted on the Income Tax Portal, contacted her after 10-12 days owing to him being busy with work pressure in New Zealand. Thus, a minor delay of 9 days be condoned in light of above bonafide facts presented before your Honor and admit the Appeal. A separate Condonation of Delay and a Request Letter U/r 46A has also been filed along with this Appeal Filing 5.2. Therefore, it is apparent from record that the Appellant in fact did agitate on the issue and service of notices. The Appellant did mention that her husband who resides in New Zealand whose email is submitted on the Income Tax Portal (Pg 9 to 10 of the Paper Book), received the Notices. However, due to him staying in New Zealand bound by work pressure, and the fact that the Appellant, a housewife not being technically proficient with Computers and having minimal knowledge of the workings and proceedings of a Scrutiny or Penalty proceeding the said Notices U/s 142(1) aforementioned were left inadvertently unresponsive.”

3.

Per contra, the Ld.DR is heard, who has relied on the orders passed by the AO as well as that of the Ld.CIT(A).

4.

We have heard the rival contentions and perused the material available on record. On perusal of the order passed by the AO u/s. 271(1)(b) of the Act, it is noted that the AO has initially issued notices on three occasions i.e., on 05-04-2023, thereafter on 27-12-2023 and the third notice was issued on 28-02-2024, which was shown as delivered to the assessee, however, there was no compliance on the part of the assessee. We, therefore, find that there is a lack of diligence on the part of the assessee in terms of not responding to the notices so issued by the AO. At the same time, we find that the assessee has put forward an explanation the reasonability of which in the context of present facts needs to be seen. It has been explained by the ld Counsel for the assessee that the assessee is a housewife and not proficient with computers and all her tax matters have been handled by her husband who was based overseas and was travelling most of the time and given that, it is her husband‟s email id which has been provides for all communication, the notices could not be responded to. We find that in the present era, where communication is happening through e-mail which can be accessed in any part of world having the requisite connectivity, the explanation so put forth by the assessee doesn‟t sound convincing. The assessee‟s husband is a senior executive and is well-versed with the IT system and having access to computers and his email, it seems highly unlikely that he couldn‟t access the email sent by the tax department and respond to the notices so issued. It is a clear case of lack of diligence on part of the assessee and her husband and no reasonable explanation has been forthcoming and the necessary consequences therefore shall follow. At the same time, it appears that it is a case where the same set of information which has been sought in the notices so issued by the AO and therefore, the penalty for non-compliance needs to be seen in the context of the information that has been sought and not supplied with. Further, it is a case of levy of penalty u/s 271(1)(b) and not a case of levy of penalty u/s 271(1)(c) of the Act and therefore, the fact that the quantum proceedings have been set-aside to the file of the AO has no bearing in the instant case. Considering the entirety of the facts and circumstances of the case, we restrict the levy of penalty to Rs 10,000/- and the remaining penalty is hereby directed to be deleted.

5.

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

More judgments on Section 142(1)

All 17,244 judgments and leading authorities on Section 142(1) →

Recent GST High Court judgments

Search GST case law →