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Facts
The Assessing Officer (AO) reopened the assessment and issued notices u/s 148 as the assessee made large deposits and did not file returns. The assessee did not respond, leading to an ex-parte assessment order u/s 144 read with Section 147, which was confirmed by the CIT(A).
Held
The Tribunal held that while in some cases quantum additions might be set aside due to disproportionate punishment, a penalty of Rs. 10,000 for negligence in income tax proceedings is not disproportionate.
Key Issues
Whether the penalty imposed u/s 271(1)(b) for non-compliance with notices and failure to file returns is justified and not disproportionate to the assessee's negligence.
Sections Cited
147, 148, 144, 271(1)(b), 271F, 271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DIVISION BENCH, ‘A’ CHANDIGARH
Before: SHRI RAJPAL YADAV & SHRI KRINWANT SAHAY
आयकर अपील"य अ"धकरण,च"डीगढ़ "यायपीठ, च"डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘A’ CHANDIGARH BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER आयकर अपील सं./ "नधा"रण वष" / Assessment Year: 2010-11 Shri Ajmer Singh, Vs The ITO, C/o Shri Tej Mohan Singh, Advocate, Ward 6(5), # 527, Sector 10-D, Chandigarh. Mohali. "थायी लेखा सं./PAN NO: CWJPS6206H अपीलाथ"/Appellant ""यथ"/Respondent Assessee by : Shri Tej Mohan Singh, Advocate Revenue by : Shri Vivek Vardhan, Addl. CIT, Sr.DR Date of Hearing : 05.06.2025 Date of Pronouncement : 17.06.2025 PHYSICAL HEARING O R D E R PER RAJ PAL YADAV, VP The assessee is in appeal before the Tribunal against the order of the ld. Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 21.08.2024 passed for assessment year 2010-11.
The grievance of the assessee is that ld. CIT (Appeals) has erred in confirming the penalty imposed u/s 271(1)(b) of the Income Tax Act, 1961. A.Y. 2010-11 2
The ld. AO got an information that assessee has made deposits of more than Rs.2.60 Cr in the Saving Bank Account and did not file the return. Therefore, he reopened the assessment and issued notices u/s 148 of the Income Tax Act. The assessee did not respond to these notices, hence, he has passed the assessment order u/s 144 read with Section 147 of the Act on 22.12.2017. It was an ex- parte order according to the best judgement of the AO. This order was confirmed by the CIT (Appeals) in appeal.
Aggrieved with the order of the CIT (Appeals) dated 09.09.2019, assessee has filed an appeal before the Tribunal bearing ITA No. 1438/CHD/2019. This appeal has been allowed for statistical purposes and issues are relegated to the file of CIT (Appeals).
With the assistance of ld. Representative, we have gone through the record carefully. It is pertinent to note that assessee did not participate any of the proceedings, either assessment proceedings, penalty proceedings u/s 271F, 271(1)(c) of the Act. Therefore, he has not replied for any of the notices issued by the Revenue. It is pertinent to A.Y. 2010-11 3 observe that Tribunal has set aside the quantum addition by considering the aspect that punishment in the shape of tax liability is far dis-proportionate to the negligence committed by the assessee by not prosecuting the income tax proceedings, but here a nominal punishment of Rs.10,000/- is not dis-proportionate for his negligence. Therefore, we do not find any merit in this appeal. It is dismissed. Penalty of Rs. 10,000/- levied u/s 271(1)(b) is confirmed.
In the result, appeal of the assessee is dismissed.