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Income Tax Appellate Tribunal, MUMBAI BENCH “B” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI SANDEEP SINGH KARHAIL
PER OM PRAKASH KANT, AM This appeal has been preferred by the assessee against order dated 30.08.2022 passed by the National Faceless Appeal Centre (NFAC), Delhi (hereinafter shall be referred as ‘Ld. First Appellate Authority’), in relation to penalty levied u/s 271(1)(b) of the Income- tax Act, 1961 (in short ‘the Act’) for non-compliance of the notice
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issued during the course of assessment proceedin issued during the course of assessment proceedings for assessment gs for assessment year 2012-13.
We have heard rival submissions of the parties on the issue We have heard rival submissions of the parties on the issue We have heard rival submissions of the parties on the issue- in-dispute and perused the relevant material on record. According dispute and perused the relevant material on record. According dispute and perused the relevant material on record. According to the Assessing Officer, the assessee has not complied to notice to the Assessing Officer, the assessee has not complied to notice to the Assessing Officer, the assessee has not complied to notice u/s 142(1) of the Act issued u/s 142(1) of the Act issued on 05.10.2009 and therefore, assessee on 05.10.2009 and therefore, assessee was held to be liable for levy of penalty of ₹10,000/- was held to be liable for levy of penalty of u/s 271(1)(b) of the Act for non-compliance of the notice. According to the assessee compliance of the notice. According to the assessee compliance of the notice. According to the assessee due to change of address, the assessee could not due to change of address, the assessee could not comply comply even the notice u/s 148 of the Act issued for reopening of the assessment as notice u/s 148 of the Act issued for reopening of the assessment as notice u/s 148 of the Act issued for reopening of the assessment as well as subsequent notices issued during the reassessment and due well as subsequent notices issued during the reassessment and due well as subsequent notices issued during the reassessment and due to which the Assessing Officer has passed the reassessment order to which the Assessing Officer has passed the reassessment order to which the Assessing Officer has passed the reassessment order u/s 147 r.w.s. 144 of the Act and against which u/s 147 r.w.s. 144 of the Act and against which the assessee is in the assessee is in appeal before the Ld. First Appellate Authority. The assessee appeal before the Ld. First Appellate Authority. The appeal before the Ld. First Appellate Authority. The contended that she is a salaried person and tax was deducted she is a salaried person and tax was deducted she is a salaried person and tax was deducted by the employer on the salary and therefore no return of income the salary and therefore no return of income the salary and therefore no return of income was filed by her in the regular course of income filed by her in the regular course of income and due to change in due to change in her residential address, the notices issued could not be served upon her residential address, the notices issued could not be served upon her residential address, the notices issued could not be served upon
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her. The assessment u/s 147 r.w.s. 144 was completed on address her. The assessment u/s 147 r.w.s. 144 was completed on address her. The assessment u/s 147 r.w.s. 144 was completed on address i.e. 29, 1st Floor, Sonawala Bldg., Bank Street, Fort, Mumbai Floor, Sonawala Bldg., Bank Street, Fort, Mumbai Floor, Sonawala Bldg., Bank Street, Fort, Mumbai- 400023. However, penalty u/s 271(1)(b) 400023. However, penalty u/s 271(1)(b) i.e. impugned order has mpugned order has been served upon address 204, 3H Kalpataru Aura, Opp. R City address 204, 3H Kalpataru Aura, Opp. R City address 204, 3H Kalpataru Aura, Opp. R City Mall, L.B.S. Road, Ghatkopar West, Mumbai Mall, L.B.S. Road, Ghatkopar West, Mumbai-400086. The Ld. 400086. The Ld. CIT(A), however, as confirmed levy of penalty on the ground that CIT(A), however, as confirmed levy of penalty on the ground that CIT(A), however, as confirmed levy of penalty on the ground that assessee did not furnish any assessee did not furnish any reasonable cause for non r non-compliance of the notices. Before us, the Ld. Counsel of the assessee submitted the notices. Before us, the Ld. Counsel of the assessee submitted the notices. Before us, the Ld. Counsel of the assessee submitted that the Ld. First Appellate Authority has not considered that the Ld. First Appellate Authority has not considered that the Ld. First Appellate Authority has not considered submission of the assessee before confirming the penalty levied by submission of the assessee before confirming the penalty levied by submission of the assessee before confirming the penalty levied by the Assessing Officer. the Assessing Officer.
2.1 We find that the We find that the Assessing Officer has not mentioned any Assessing Officer has not mentioned any mode of the service of the notice dated 05.10.2019 u/s 142(1) of the mode of the service of the notice dated 05.10.2019 u/s 142(1) of the mode of the service of the notice dated 05.10.2019 u/s 142(1) of the Act before levy of the penalty. It Act before levy of the penalty. It is the responsibility of the the responsibility of the Assessing Officer to confirm whether the notice was sent by notice Assessing Officer to confirm whether the notice was sent by notice Assessing Officer to confirm whether the notice was sent by notice server or through post or through e h post or through e-mail and ensure whether mail and ensure whether same was served upon the assessee. No such fact has been brought on served upon the assessee. No such fact has been brought on served upon the assessee. No such fact has been brought on record by the Ld. Assessing Officer. Further, we find that assessee record by the Ld. Assessing Officer. Further, we find that assessee record by the Ld. Assessing Officer. Further, we find that assessee
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has raised the change of address as one of the reasonable cause for has raised the change of address as one of the reasonable cause for has raised the change of address as one of the reasonable cause for non-compliance of notice u/s 142(1) notice u/s 142(1) of the Act. In this reference, the Act. In this reference, the Ld. Counsel of the assessee has relied on the decision of the Co- the Ld. Counsel of the assessee has relied on the decision of the Co the Ld. Counsel of the assessee has relied on the decision of the Co ordinate Bench of the Tribunal in the case of ordinate Bench of the Tribunal in the case of Balram Kumar Balram Kumar Mahendra v. ITO 21 taxmann.com 222 (Delhi), wherein the Mahendra v. ITO 21 taxmann.com 222 (Delhi) Mahendra v. ITO 21 taxmann.com 222 (Delhi) Tribunal held as under: as under:
“9. We have heard both counsel and perused the records. “9. We have heard both counsel and perused the records. “9. We have heard both counsel and perused the records. We find that penalty in this case has been levied under We find that penalty in this case has been levied under We find that penalty in this case has been levied under section 271(1)(b) of the Income section 271(1)(b) of the Income-tax Act. This section tax Act. This section mandates levy of penalty for, inter alia, not complying with mandates levy of penalty for, inter alia, not complying with mandates levy of penalty for, inter alia, not complying with the notice issued the notice issued under section 142(1) or 142(3). Section under section 142(1) or 142(3). Section 273B of the Income 273B of the Income-tax Act provides that, inter alia, tax Act provides that, inter alia, penalty under section 271(1)(b) need not be imposed, if it penalty under section 271(1)(b) need not be imposed, if it penalty under section 271(1)(b) need not be imposed, if it is proved that there was a reasonable cause for the said is proved that there was a reasonable cause for the said is proved that there was a reasonable cause for the said failure of the assessee to comply with the pro failure of the assessee to comply with the provisions of visions of section 271(1)(b). In this case we find that non section 271(1)(b). In this case we find that non-appearance appearance of the assesses before the Assessing Officer was caused of the assesses before the Assessing Officer was caused of the assesses before the Assessing Officer was caused by non-receipt of the notice. This in our considered opinion receipt of the notice. This in our considered opinion receipt of the notice. This in our considered opinion can be construed as reasonable cause under section 273B can be construed as reasonable cause under section 273B can be construed as reasonable cause under section 273B for non-comp compliance by the assessees.
Under such circumstances, rigours of penalty under 10. Under such circumstances, rigours of penalty under 10. Under such circumstances, rigours of penalty under section 271(1)(b) are not attracted in the case of the section 271(1)(b) are not attracted in the case of the section 271(1)(b) are not attracted in the case of the assessee. In this regard, we place reliance from the apex assessee. In this regard, we place reliance from the apex assessee. In this regard, we place reliance from the apex court decision rendered by a larger Bench comprising of court decision rendered by a larger Bench comprising of court decision rendered by a larger Bench comprising of
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three of their Lordships in the case of Hindustan Steel Ltd. of their Lordships in the case of Hindustan Steel Ltd. of their Lordships in the case of Hindustan Steel Ltd. v. State of Orissa [1972] 83 IT 26 (SC) wherein it was held v. State of Orissa [1972] 83 IT 26 (SC) wherein it was held v. State of Orissa [1972] 83 IT 26 (SC) wherein it was held that (headnote) "an order imposing penalty for failure to that (headnote) "an order imposing penalty for failure to that (headnote) "an order imposing penalty for failure to carry out a statutory obligation is the result of a quasi carry out a statutory obligation is the result of a quasi carry out a statutory obligation is the result of a quasi- criminal proceedings, and criminal proceedings, and penalty will not ordinarily be penalty will not ordinarily be imposed unless the party obliged either acted deliberately imposed unless the party obliged either acted deliberately imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious in defiance of law or was guilty of conduct contumacious in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its or dishonest, or acted in conscious disregard of its or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely obligation. Penalty will not also be imposed merely obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be ause it is lawful to do so. Whether penalty should be ause it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a imposed for failure to perform a statutory obligation is a imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised matter of discretion of the authority to be exercised matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant judicially and on a consideration of all the relevant judicially and on a consideration of all the relevant circumstances. Even if a minimum pe circumstances. Even if a minimum penalty is prescribed, nalty is prescribed, the authority competent to impose the penalty will be the authority competent to impose the penalty will be the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a justified in refusing to impose penalty, when there is a justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act, or technical or venial breach of the provisions of the Act, or technical or venial breach of the provisions of the Act, or where the breach flows from a bona fide belief that the where the breach flows from a bona fide belief that the where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by is not liable to act in the manner prescribed by is not liable to act in the manner prescribed by the statute.”
2.2 We find that in the instant case before us also ex We find that in the instant case before us also ex We find that in the instant case before us also ex-parte assessment has been completed against the assessee due to non- assessment has been completed against the assessee due to non assessment has been completed against the assessee due to non compliance of the notices and in which the assessee has compliance of the notices and in which the assessee has compliance of the notices and in which the assessee has substantiated change of the address as the main reason. Therefore, change of the address as the main reason. Therefore, change of the address as the main reason. Therefore, respectfully following the finding of the Tribunal (supra), we direct respectfully following the finding of the Tribunal (supra), we direct respectfully following the finding of the Tribunal (supra), we direct
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the Assessing Officer to delete the penalty levied u/s 271(1)(b) of the the Assessing Officer to delete the penalty levied u/s 271(1)(b) of the the Assessing Officer to delete the penalty levied u/s 271(1)(b) of the Act on the ground of being the reasonable cause for non-compliance Act on the ground of being the reasonable cause for non Act on the ground of being the reasonable cause for non of the notice u/s 142(1) of the Act. The ground of the notice u/s 142(1) of the Act. The grounds of the appeal of the of the appeal of the assessee are accordingly allowed. assessee are accordingly allowed.
In the result, appeal of the assessee is allowed. In the result, appeal of the assessee is allowed. In the result, appeal of the assessee is allowed.
Order pronounced under Rule 34(4) Order pronounced under Rule 34(4) of the ITAT Rules, of the ITAT Rules, 1963 on 25/11/2022. /11/2022. Sd/- Sd/- (SANDEEP SINGH KARHAIL NGH KARHAIL) (OM PRAKASH KANT OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 25/11/2022 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. BY ORDER, BY ORDER, //True Copy// (Sr. Private Secretary) (Sr. Private Secretary) ITAT, Mumbai ITAT, Mumbai