SHIVPRASAD KASHINATH DESAI,SINDHUDURG vs. ITO WARD , KUDAL

The captioned appeal at the instance of assessee pertaining to A.Y. 2016-17 is directed against the order dated 28.03.2025 of National Faceless Appeal Centre (NFAC) Delhi passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of Penalty Order dated 27.09.2022 passed u/s.271(1)(b) of the Act.

The only grievance of the assessee is against the levy of penalty at Rs.10,000/- u/s.271(1)(b) of the Act.

We have heard the rival contentions and perused the record placed before us. Case of the assessee selected for re- assessment proceedings for A.Y. 2016-17 on the basis of the Shivprasad Kashinath Desai information that the assessee has sold immovable property valued at Rs.49.27 lakh on 29.12.2015. However, assessee failed to appear on the date of hearing. Before us, Ld. Counsel for the assessee states that the assessee resides in a remote village and is not well versed with the income-tax proceedings and has no income liable to tax. Land in question was purchased by the assessee’s father in the name of the assessee, his wife and his Son and Daughter. He submitted that only one notice of hearing was sent and immediately thereafter the assessment has been completed.

We have gone through the averments made by ld. Counsel for the assessee and considering the practical difficulties faced by the assessee and the ‘reasonable cause’ which prevented him from appearing before ld. AO, we find that assessee deserves immunity from levy of impugned penalty in light of the provisions of section 273B of the Act as the assessee has proved that there was ‘reasonable cause’ for the said failure in attending to the notice of hearing sent by ld. AO. We therefore delete the impugned penalty of Rs.10,000/- levied u/s.271(1)(b) of the Act. Finding of ld.CIT(A) is set aside and the grounds of appeal raised by the assessee are allowed.