RAVINDER SINGH,LUDHIANA vs. ITO, WARD-3(5), LUDHIANA

An assessment has been framed against the assessee on best judgment basis u/s 144 on 04-12-2019 wherein returned income of Rs.10.49 Lacs was assessed at Rs.132.81 Lacs. The assessee failed to appear during assessment proceedings. Since the assessee did not comply with 5 hearing notices as issued by Ld. AO u/s 142(1) on various dates, impugned penalty was initiated for non-compliance of these notices. The Ld. AO imposed penalty of Rs.10,000/- for each of the five defaults on the ground that the assessee failed to establish reasonable cause for non-appearances. The Ld. CIT(A) confirmed the same on the ground that the notices were received on email id of assessee’s Chartered Accountant and there was no reasonable cause. Aggrieved, the assessee is in further appeal before us.

The assessee, indeed, has defaulted in complying with identical notices as issued by Ld. AO u/s 142(1) from time to time. However, it could be seen that penalty has been levied for five identical defaults which are recurring in nature. The Ld. AO could have framed best judgment assessment immediately after serving initial notice only. Therefore, we restrict the impugned penalty to the extent of Rs.10,000/- only for first default. No other ground has been urged in the appeal.