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Facts
The assessee filed an appeal against the penalty levied under Section 271(1)(b) for non-compliance with notices during assessment proceedings. The penalty was confirmed by the CIT(A) despite the assessee claiming the notices were sent to his old address where his family resided and they did not inform him.
Held
The Tribunal held that the CIT(A)'s reasons for rejecting the assessee's explanation were not sustainable. The Tribunal found that the assessee had provided a reasonable cause for non-compliance, and there was no infirmity pointed out by the AO or CIT(A) in the explanation.
Key Issues
Whether the assessee provided a sufficient cause for non-compliance with assessment notices, and whether the penalty levied under Section 271(1)(b) was justified.
Sections Cited
271(1)(b), 142(1), 148, 250
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Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: SMT. ANNAPURNA GUPTA & SHRI T.R. SENTHIL KUMAR
The present appeal has been filed by the assessee against order passed by the Commissioner of Income Tax(Appeals), National Faceless Appeal Centre (NFAC), Delhi (in short ‘the CIT(A)’) confirming the levy of penalty under Section 271(1)(b) of the Income Tax Act, 1961 (in short ‘the Act’) dated 08.11.2024 pertaining to Assessment Year 2013-14.
The grounds raised in the appeal by the assessee are as under:
“1.1 The order passed u/s. 250 passed 08.11.2024 for A.Y.2013-14 by r. NFAC, Delhi, for imposing penalty of Rs 30,000/- for alleged default of noncompliance to the notice issued u/s 142(1) on 28.08.2019, 19.09.2019 and 17.10.2019 is wholly illegal unlawful and without jurisdiction. 1.2 The Ld. CIT(A) has grievously erred in law and or on facts in not allowing sufficient opportunity before passing the impugned order of penalty. 1.3 The Ld. CIT(A) has grievously erred in law and or on facts in imposing penalty of Rs 30,000/- for alleged default of non- compliance to the notices issued u/s 142(1).”
The grievance raised by the assessee in the present appeal is against the confirmation of penalty levied u/s. 271(1)(b) of the Act amounting to Rs.30,000/- for not complying with the notices issued during assessment proceedings. The fact that the assessee did not respond to three notices issued to him during assessment proceedings u/s.148, 142(1) and the show cause notice issued by the AO during assessment proceeding is not disputed. What is disputed before us is the non-acceptance of the sufficient cause demonstrated by the assessee before the Ld. CIT(A) for not complying to the aforesaid notices.
It was pointed out that the assessee had given reasons for non-compliance of the aforesaid noticed as being sent on his old address where his brother along with his old parents resided, who had not informed or handed over the notices to him. The Ld. CIT(A) has found the plea of the assessee be totally unacceptable holding at para 5.4 of his order as under:
“5.4 I have perused the penalty order and submission of the appellant and fact of the case. The appellant has claimed that the manual notices was sent on old address where his bother Sh Mahendra B. Sutariya and old parents residing and they were not informed or handed over the notices taken by the residents of this place. It is undisputed fact that the notices issued by the AO was duly served to the appellant on the address of the appellant. It is important to note that the all the notices were also issued to the appellant on the e-mail registered/designated with e-filling portal. In this context, it is noted that the address at which the notices have been delivered by speed post by the AO are the last known addresses available with the Department and moreso none of the said notices have returned undelivered. It is the responsibility of the appellant to update his/her address in the Department database. Further, it is noted that during penalty proceedings the AO referred the matter to verification unit (VU) of the Department for manual service of notice. VU vide communication dated 21.12.2021 informed the AO that notice has been sent through speed post with Tracking ID: EG127761578IN. It is further noted that the appellant has himself accepted that the notices was received on the old address of the appellant. The appellant has also received SMS alert on his mobile and emails on his registered email ID regarding the issuance of notices by the Department. Hence, it is an undisputed fact that the notices were duly delivered to the appellant through all possible modes of communication. Plea of the appellant in present era is totally unacceptable especially in light of the fact that the main case of the appellant was reopened on ground of purchase of immovable property during FY 2012-13 relevant to AY 2013-14. Therefore, the claim of the appellant that sufficient opportunity was not provided to the appellant is also not acceptable.”
As is evident from the perusal of the above, the Ld. CIT(A) has not accepted the assessee’s explanation stating that the notices were served at the last known address of the assessee by registered post and none of them have returned back undelivered: that it is the responsibility of the assessee to update his address. The Ld. CIT(A) has also stated that sufficient opportunity was provided to the assessee.
We find that none of the reasons given by the Ld. CIT(A) impinges in any way on the sufficiency of cause adduced by the assessee before him for not complying with the notices issued during assessment proceedings. The fact that the notices were issued at the registered address/last known address of the assessee or for that matter the notices were not returned back unserved doesn’t take away the fact that the assessee was not residing at that address at all as stated by him before the Revenue authorities. And this fact has not been found to be false/untrue by the Ld. CIT(A).
In the light of the same, we do not agree with the Ld. CIT(A) that there was no sufficient cause given by the assessee for non- complying with the assessment notices. On the contrary, we find that the assessee had given reasonable cause for not complying with the same and no infirmity being pointed out by either the AO or the Ld. CIT(A) in the said explanation, there is no reason at all we hold, to reject the same as non-acceptable.
In the light of the same, we hold that there is no case for levy of penalty for non-compliance of notices.
The penalty, therefore, levied amounting to Rs.30,000/- is directed to be deleted.
In the result, appeal filed by the assessee is allowed.