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Facts
The assessee's return for AY 2016-17 was processed, and then reopened under Section 147 of the Income Tax Act due to alleged under-reporting of salary income. The Assessing Officer proceeded ex-parte under Section 144, disallowing deductions and imposing a penalty of Rs. 40,000/- under Section 271(1)(b) for non-compliance with notices. The assessee appealed this penalty.
Held
The Tribunal noted that the statutory notices were sent to an email ID not belonging to the assessee, and no physical or SMS notice was received. Given the assessee's uneducated status and engagement of an Authorized Representative, the Tribunal found the claim of non-receipt of notices believable. Consequently, it was held that the case falls under the exceptions provided in Section 273B of the Act.
Key Issues
Whether the penalty under Section 271(1)(b) for non-compliance with statutory notices is leviable when the notices were not received by the assessee due to issues with the email ID of the authorized representative.
Sections Cited
271(1)(b), 143(1), 133A, 147, 148, 142(1), 144, 273B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY, VP & SHRI NARENDRA KUMAR BILLAIYA, AM
O R D E R Per Saktijit Dey, VP:
The present appeal has been filed by the assessee against the order dated 28.06.2024 passed by National Faceless Appeal Centre (NFAC), Delhi, confirming the penalty imposed of Rs.40,000/- u/s. 271(1)(b) of the Income Tax Act, 1961 (‘the Act’ for short) pertaining to assessment year (A.Y.) 2016-17.
Briefly stated, the assessee is a resident individual. For the A.Y. under dispute, assessee filed his return of income declaring total income of Rs. 2,95,560/-. Initially, the return of income filed by the assessee was processed u/s. 143(1) of the Act. Subsequently, based on the information received in force of the survey action u/s. 133A of the Act, in case of Shri Vijay Sawant, ITP, assessment in case of the assessee was reopened u/s. 147 of the Act. The reason of reopening was on account of under reporting/mis-reporting of salary income. As alleged by the Assessing Officer, assessee did not respond to any of the statutory notices issued u/s.148 and 142(1) of the Act. Thus, alleging non-compliance, the Assessing Officer proceeded to complete the assessment ex-parte to the best of his judgement, invoking the provisions of section 144 of Act. While doing so, the Assessing Officer, made an addition of Rs.2,55,909/-disallowing certain deductions claimed by the assessee from the salary income. Be that as it may, alleging non-compliance with the statutory notices, the Assessing Officer initiated proceedings for imposition of penalty u/s. 271(1)(b) of the Act and ultimately passed an order under the aforesaid provision imposing penalty of Rs.40,000/-. Though, the assessee contested the imposition of penalty by filing an appeal before the first appellant authority, however, he was unsuccessful.
We have heard the parties and perused the material on record. It is the say of the assessee before us that he is an uneducated person and employed as security guard. The assessee had engaged an Authorized Representative to represent his case before the Assessing Officer. It was submitted that statutory notices issued by the Assessing Officer were in the email ID of the said Authorized Representative. Thus, it was submitted that the assessee was totally unaware of the proceedings before the Assessing Officer.
Having considered rival submissions and perused materials on record, we have noticed that the statutory notices issued u/s.148/142(1) of the Act were sent to an email ID which does not belong to the assessee. It has been asserted before us by the assessee that, not even a single notice or SMS message was delivered to the assessee physically or in his mobile number. Having perused the materials on record, we are of the view that the assertions made by the assessee regarding non receipt of statutory notice is believable. There is no material on record to demonstrate that even after repeated non-compliance to the statutory notices sent to the email ID of the Authorized Representative, the Assessing Officer made any attempt to personally contact the assessee. The assessee being an uneducated person and working as security guard cannot be expected to track the proceedings before the Assessing Officer. Therefore, in our view, assessee’s case falls within the exceptions provided u/s. 273B of the Act. That being the case, we are inclined to delete the penalty imposed of Rs.40,000/- u/s. 271(1)(b) of the Act.
In the result, the appeal is allowed.
Order pronounced in the open court on 03.12.2024