WAHABUDDIN,MEERUT vs. ITO, MEERUT

Nobody was present on behalf of the assessee, we therefore, proceeded ex-parte qua the assessee and the appeals are disposed off on merit after hearing the ld. DR.

Common issue is involved in these appeals which were heard together so these are being disposed off by this consolidated order for the sake of convenience and brevity. & 4178/Del/2016 2 Wahabuddin 4. The only issue raised by the assessee in these appeals relates to the sustenance of penalty of Rs.10,000/- in each of the year u/s 271(1)(b) of the Income Tax Act, 1961 (hereinafter referred to as the Act).

Facts of the case in brief are that the assessee had not filed any return of income for the year under consideration. The AO issued the notice u/s 148 of the Act on 04.04.2014 on the basis of AIR information that the assessee had deposited Rs.57,60,290/- in ICICI Bank on different dates, the assessment was completed u/s 144 of the Act on 02.09.2014 at an income of Rs.57,60,290/-. The AO mentioned that the notices u/s 142(1) of the Act dated 14.05.2014 and 14.08.2014 were issued for compliance on 28.05.2014 and 27.08.2014 respectively but the assessee refused to take the notices. He, therefore, initiated the penalty proceedings u/s 271(1)(b) of the Act on account of failure to comply the notice dated 02.09.2014 issued for compliance on 30.09.2014 and levied the penalty of Rs.10,000/- for each of the assessment years under consideration.

Being aggrieved the assessee carried the matter to the ld. CIT(A) and submitted that the contention of the AO that there was refusal to take/receive notices was misplaced since the assessee had left out the house early morning and there was no authorized person to take the notices. The ld. CIT(A) did not find merit in the submissions of the assessee and confirmed the penalty by observing that the AO gave a & 4178/Del/2016 3 Wahabuddin repeated notices u/s 142(1) of the Act but there was no compliance and even the notice u/s 271(1)(b) of the Act was also refused.

Now the assessee is in appeal. The ld. DR strongly supported the orders passed by the authorities below and further submitted that since the assessee did not comply with the various notices issued by the AO, therefore, the penalty u/s 271(1)(b) of the Act dated 02.09.2014 was rightly levied by the AO and the ld. CIT(A) was fully justified in sustaining the same.

We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is noticed that the AO did not levy the penalty for the notices issued u/s 142(1) of the Act on 15.05.2014 and 14.08.2014. The penalty u/s 271(1)(b) of the Act has been levied for the failure to comply the notices dated 02.09.2014. The assessee explained before the ld. CIT(A) that on the said date, he was not at home and there was no authorized person to take the notice. The said explanation of the assessee had not been considered by the ld. CIT(A), it is also not the case of the ld. CIT(A) that the said statement was false. We, therefore, considering the totality of the facts, are of the view that when the assessee was not present at home and had not received the notice, there was no occasion to refuse to receive the notice. In that view of the matter, we are of the view that the penalties levied by the AO and sustained by the ld. CIT(A) & 4178/Del/2016 4 Wahabuddin for the assessment years 2011-12 and 2012-13 u/s 271(1)(b) of the Act are not sustainable. Accordingly, the same are deleted.

In the result, the appeals of the assessee are allowed. (Order Pronounced in the Court on 06/11/2017)