SAAEMAH BEGUM ,KOLKATA vs. ITO, WARD - 28(2) , KOLKATA

Brief facts of the case are that the Assessing Officer noted that the assessee had declared total income of Rs. 1,74,380/- and the case was selected for scrutiny. According to Assessing Officer, he issued notice u/s 143(2) of the Act on 23.08.2010 fixing the hearing on 06.09.2010. According to him, none appeared so he sent notice u/s 142(1) on 28.06.2011 fixing the date of hearing on 25.07.2011, however according to Assessing Officer this notice was also non responded. Therefore, he issued letter dated 02.09.2010 fixing the date of hearing on 14.09.2011 which was also non- responded to and therefore he issued another notice on 15.11.2011, pursuant to which the assessee responded vide letter dated 29.11.2011 and explained that all cash deposited in the bank account related to the business. According to the Assessing Officer no documents / materials were submitted to support this claim and since the Saaemah Begum A.Y. 2009-10 assessee did not appear before him to explain the return of income, he initiated penalty proceedings u/s 271(1)(B) for non-compliance of notice u/s 143(2) and u/s 142(1) and thereafter imposed the penalty of Rs. 20,000/-.

Aggrieved the assessee preferred an appeal before the ld. CIT(A) who was pleased to dismiss citing the reason that the assessee did not appear.

Aggrieved the assessee is in appeal before us.

None appeared for the assessee. We have perused the statements of facts filed by the assessee from which it is noted that the assessee was not keeping well and was undergoing treatment for various ailments, so could not appear personally before the Assessing Officer. However when the Assessing Officer re-fixed the date of hearing by notice dated 02.09.2011on 14.09.201, the assessee received it belatedly after 14.09.2011. According to assessee, on a perusal of the notice re-fixing the date of hearing it was evident that the said notice was only posted on 15.09.2011 and therefore, the notice reached the assessee after the date of hearing, so in the aforesaid facts assessee pleads that non-appearance before the AO was not deliberate. In the light of the aforesaid facts, we are of the opinion that there was reasonable cause for the assessee not appearing before the Assessing Officer and therefore we delete the penalty. However, the Ld. D.R pointed out to us during hearing that any out- come/decision on this penalty appeal should not affect the quantum assessment passed by the Assessing Officer .

Needless to say the quantum addition if any made by the Assessing Officer against the assessee during the assessment proceedings have nothing to do with the penalty proceeding u/s 271(1)(B) of the Act. Therefore, we clarify that this decision of ours, will not preclude in any way the decision of the appellate authorities while they decide the merit of the quantum addition if any made by the AO.

In the result, appeal of the assessee is allowed.