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Facts
The assessee, an individual engaged in the livestock business, did not file a regular return of income for AY 2016-17. Consequently, the AO issued notices under sections 148 and 142(1), which were not complied with. The AO then completed the assessment and levied a penalty under section 271(1)(b) for non-compliance with hearing notices.
Held
The Tribunal held that the assessee's failure to respond to the notices was due to being uneducated and not maintaining an email ID. The AO also failed to follow the prescribed Standard Operating Procedure (SOP) for communication, such as sending notices via speed post and SMS. The assessee was also undergoing medical treatment for spine and neck injuries during the period.
Key Issues
Whether the penalty levied under section 271(1)(b) is justified when the assessee failed to comply with notices due to lack of education, medical reasons, and non-adherence to communication SOP by the AO.
Sections Cited
271(1)(b), 147, 144B, 148, 142(1), 143(2), 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM & SHRI RAHUL CHAUDHARY, JM
Assessment Year: 2016-17 Jihas Abduljaleel .......... Appellant Shihas Manzil, Kannamkode, Kummil Post, Kollam [PAN: BLYPA6333C] vs. The Income Tax Officer, WD-2, Kollam .......... Respondent Assessee by: Shri Shakunth Selvaraj, CA Revenue by: Ms. Neethu S., Sr. DR Date of Hearing: 18.08.2025 Date of Pronouncement: 19.08.2025 O R D E R Per: Inturi Rama Rao, AM This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi (NFAC) dated 23.05.2025 for Assessment Year (AY) 2016-17.
Brief facts of the case are that that appellant is an individual, engaged in the business of livestock. No regular return of income for AY 2016-17 was filed by the appellant. Therefore, the AO issued notice u/s. 148 and 142(1) of the Income Tax Act, 1961 (the Act), which remained uncomplied with by the appellant. Subsequently, Jihas Abduljaleel the National Faceless Assessment Centre (hereinafter called "the AO") completed the assessment u/s. 147 r.w.s. 144B of the Act. Therefore, the AO issued notice u/s. 271(1)(b) of the Act for non- compliance of hearing notices. In response to the show cause notice the appellant had not even filed any explanation. In the circumstances, the AO had proceeded with levy of penalty of Rs. 40,000/- vide order dated 16.08.2024 passed u/s. 271(1)(b) of the Act.
Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the levy of penalty.
Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal.
It is submitted that the notice issued by the AO went unnoticed by the appellant as he is an uneducated person and does not maintain email ID. It is further submitted that as per the SOP dated 03.08.2022, AO should have sent the notice through physical mode to the latest known address through speed post and also should have sent SMS, which the AO had failed to do. It is further submitted that the appellant was suffering from spine and neck injury and was undergoing treatment during the period. In support of this the appellant also filed a medical certificate which is enclosed at page Nos. 37 to 39 of the paper book. Also reliance was placed on the decision of the Delhi Bench of the Tribunal in the case of Rekha Rani v. DCIT, dated 06.05.2015.
Jihas Abduljaleel 6. We have heard the rival contentions and perused the material available on record. The AO had levied penalty u/s. 271(1)(b) of the Act for the failure of the assessee to respond to the notices issued u/s. 142(1), u/s. 143(2) and u/s. 144 of the Act. We are satisfied with the sufficiency of the reasons for non-compliance of the notices in view of the submissions made by the appellant. Therefore, it is not a fit case for levy of penalty. Accordingly, we direct the AO to delete the penalty of Rs. 40,000/- levied u/s. 271(1)(b) of the Act.
In the result, the appeal filed by the assessee stands allowed.
Order pronounced in the open court on 19th August, 2025.