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Facts
The AO levied a penalty of Rs. 50,000 under Section 272A(1)(d) against the assessee for non-compliance with five notices issued during assessment proceedings framed under Section 144. The assessee contended that most notices were sent to a wrong address, preventing their attendance, but the NFAC upheld the penalty.
Held
The Tribunal found that only the first two notices were properly served, making the assessee liable for a penalty of Rs. 10,000 for the initial default. For subsequent non-compliances, the AO should have proceeded ex-parte instead of levying further penalties based on improperly served notices. The penalty was accordingly reduced from Rs. 50,000 to Rs. 10,000.
Key Issues
Whether penalty for non-compliance with notices under Section 272A(1)(d) is justified for notices sent to an incorrect address.
Sections Cited
272A(1)(d), 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH: ‘F’: NEW DELHI
Before: SHRI N.K. BILLAIYA & MS ASTHA CHANDRA
This appeal by the assessee is preferred against the order dated 24.02.2023 by NFAC, Delhi, pertaining to A.Y. 2017-18.
The sum and substance of the grievance of the assessee is that the CIT(A) erred in sustaining the penalty imposed by the AO u/s 272A(1)(d) of the Act. Page 1 of 4
ITA NO.- 1194/Del/2023 Pawan Kumar. 3. The root cause for the levy of penalty lies in the assessment order dated 29.12.2019 framed u/s 144 of the Act. Where the AO has issued five notices which were not responded by the assessee. This prompted the AO to initiate penalty proceedings u/s 272A(1)(d) of the Act for non- compliance with the notices, and for each default, the AO levied penalty of Rs. 10,000/- totaling to Rs. 50,000/-. This action of the AO was upheld by the NFAC.
Before us, the Counsel for the assessee vehemently stated that only two notices were sent on the address given in the PAN data base and other notices were sent to wrong address of the assessee. Therefore, the assessee could not attend the assessment proceedings.
We have carefully considered the orders of the authorities below.
We have also the benefit of Report of the Assessing Officer dated 28.02.2024 submitted by the DR. As per the details, we find that first two notices were issued to the assessee through speed-post and the same were not returned. Though, the report mentions five notices, and the penalty has been levied for each default. We are of the considered view that the assessee is liable to pay the penalty on the first default.
Thereafter, the AO could have proceeded to frame an ex-parte order. We Page 2 of 4
ITA NO.- 1194/Del/2023 Pawan Kumar. accordingly direct the AO to levy a penalty of Rs. 10,000/- only and delete the balance.
In the result, appeal of the assessee is partly allowed.
Order pronounced in the Open Court on 04.03.2024