SARVESWARAN DEEPA,KANCHIPURAM vs. THE INCOME TAX OFFICER, NON CORP WARD 22(6), TAMBARAM, TAMBARAM

This appeal by the assessee is directed against the order dated 30.06.2025 passed by the Learned Commissioner of Income Tax (Appeals), NFAC, Delhi [hereinafter referred to as the “ld.CIT(A)”], arising from the penalty order dated 15.09.2022 passed by the Income Tax Officer, Non-Corporate Ward

The assessee has raised the following grounds of appeal: -

The brief facts of the case are that the assessee is an individual, who was employed with M/s. Nokia India Private Limited during the assessment year under consideration. For the A.Y.2015-16, the assessee filed her return of income electronically on 01.08.2015, declaring a total income of Rs.4,67,853/- and claimed refund of Rs.1,61,590/-.

On the basis of suspected fraudulent PAN flagged in the ITBA system, the case of the assessee was reopened, suspecting fraudulent claim of refund.

During the course of the penalty proceedings, the assessee submitted before the AO that the notices issued u/s.142(1) of the Act had been served on an e-mail address belonging to her authorised representative and, therefore, were not received by her personally. It was further contended that the assessee could not furnish a response to the said notices as she had no knowledge of their issuance, owing to non-receipt of the communication. On these grounds, it was urged that there existed a reasonable cause for the alleged non- compliance with the notices issued u/s.142(1) of the Act, and consequently, a request was made to the AO to drop the penalty proceedings initiated u/s.271(1)(b) of the Act.

The AO, however, was not satisfied with the explanation so tendered. The AO observed that it was the obligation of the assessee to ensure that her correct and updated e-mail address was duly intimated to the Department. It was further

Aggrieved by the aforesaid penalty order, the assessee preferred an appeal before the ld.CIT(A), who, vide order dated 30.06.2025, upheld the penalty of Rs.30,000/- levied by the AO u/s.271(1)(b) of the Act. Being further aggrieved, the assessee is in appeal before this Tribunal.

The ld.AR, appearing on behalf of the assessee, submitted that the impugned notices issued u/s.142(1) of the Act were sent to the e-mail address of the assessee’s erstwhile Tax Consultant and not to the assessee herself. It was contended that the said Tax Consultant, having ceased to represent the assessee, did not bring the contents of such notices to the knowledge of the assessee, and consequently, there was no compliance on the part of the assessee. The ld.AR further submitted that no physical notices were served at the assessee’s registered address. According to the ld.AR, in the absence of :-5-: ITA. No:1973/Chny/2025 any response to e-mail communications, it was incumbent upon the Revenue authorities to have effected service of notice through physical mode, which admittedly was not done in the present case. In these circumstances, the ld.AR argued that the assessee cannot be treated as having defaulted in compliance, since there was no valid service of notice. The ld.AR, therefore, prayed for deletion of the penalty levied by the AO u/s.271(1)(b) of the Act. Without prejudice, the ld. AR alternatively submitted that, even otherwise, the penalty, if at all leviable, ought to be restricted to one instance of default alone.

Per contra, the ld.DR vehemently supported the order of the AO and contended that the assessee has consistently exhibited a pattern of non- compliance. It was further submitted that the assessee failed to respond to the hearing notices issued by the ld.CIT(A). In view of the foregoing, the ld.DR urged that the penalty levied by the AO u/s.271(1)(b) of the Act be confirmed.

We have heard the rival contentions and perused the orders of the lower authorities. It is an admitted fact that the assessee has failed to respond to the notices issued u/s.142(1) of the Act on three different occasions. On examination of the matter, we find that the nature of default committed by the assessee is identical in all three instances. In view of the settled position, the penalty u/s.271(1)(b) of the Act can be imposed only in respect of one default.

In view of the foregoing, we are of the considered opinion that the penalty levied u/s.271(1)(b) of the Act should be restricted to one instance of non- compliance with the notice u/s.142(1) of the Act dated 13.11.2021. Accordingly, the penalty levied by the AO is confirmed at Rs.10,000/- instead of Rs.30,000/- as confirmed by the ld.CIT(A). Therefore, the penalty to the extent of Rs.20,000/- is deleted. The grounds of appeal of the assessee are, therefore, partly allowed.

In the result, the appeal of the assessee is partly allowed.