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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI C.M.GARG & SHRI O.P.MEENA
आदेश /O R D E R PER BENCH This appeal filed by the assessee is directed against the order of Learned) Commissioner of Income-tax
(Appeals)-I, Bhopal [in short CIT (A)] dated 30.06.2016 pertaining to Assessment Year 2006-07, which in
turn has arisen from the order dated 24.04.2014 passed under section 271(1) (b) of Income Tax Act, 1961 (‘the Act’) by the Income Tax Officer 1(1), Bhopal (in short “the AO”).
In the grounds No. 1 &2 of appeal, the assessee has assailed the order of ld. CIT (A) in confirming
the penalty of Rs. 10,000/- levied under section 271(1) (b) of the Act.
Succinctly, facts as culled out from the orders of lower authorities are that the assessee has not
filed any return of income. An AIR information was received for non Pana Data that the assessee has made investment of Rs. 4 Lakh in mutual fund. Therefore, after recording reason, notice u/s.148 was
issued on 26.03.2013, but no return of income was filed, hence, after following due process of law,
assessment was made under section 144 of the Act by making addition of Rs. 4 lakhs. During the course
Shri Anil Kumar Biddua v. ITO1 (1)/I.T.A. No. 1017/Ind/2016/A.Y.:06-07 Page 2 of 3
of assessment proceedings, notice under section 142(1) was issued on 01.08.2013 fixing the hearing on
14.08. 2013. However, same was not complied with nor any reply to show cause notice u/s. 274 read
with section 271(1) (b) dtd. 21.10.2013 was filed nor any written submissions were made. Again, a show
cause notice u/s. 274 read with section 271(1) (b) issued 11.04.2014 for fixing hearing on 23.04.2014,
which was served through speed post. In response to which, none attended nor any written
submissions/explanation was furnished. In view of these facts and circumstances, the AO levied a
penalty of Rs. 10,000/- was levied under section 271(1) (b) of the Act.
Being, aggrieved the assessee filed an appeal before the ld. CIT (A). During the course of
appellate proceedings, the appellant merely submitted that the assessee did not receive notice by speed
post. However, ld. CIT (A) observed that penalty order was also sent on same address and the assessee
has duly received it and appeal was filed against this order. Therefore, the contention was not found
acceptable and as seen that the assessee has not attended the assessment proceedings nor compelled
with notice under section 142(1). It is not even complied with show cause notice under section 271(1)
(b). Accordingly, levy of penalty was cam to be confirmed.
Being, aggrieved the assessee filed this appeal before the Tribunal. The Ld. A.R. submitted that
the assessee has not receive the notice under section 142(1) of the Act as the notice was sent on wrong
postal address at G/S Old Police Colony behind Civil Court Bhopal whereas assessee`s correct address
was G/5 old Police Colony behind Civil Court Bhopal. The Ld. A.R. also filed a copy of bank pass book in
support of correct address. Therefore, there was reasonable cause for non-compliance of the notice.
The assessee has made all efforts to obtain and submit the information as and when it came to his
knowledge. The counsel of the assessee appeared before the CIT(A) after receiving penalty order by
hand from Department and not because the notice was received by postal address by the assessee.
Therefore, the assessee was unable to comply with, the notices issued to him.
Shri Anil Kumar Biddua v. ITO1 (1)/I.T.A. No. 1017/Ind/2016/A.Y.:06-07 Page 3 of 3
On the other hand, the Ld. D.R. relied on the orders of lower authorities and submitted that the
assessee has failed to furnishing return of income nor any compliance of the statutory notices was
made. Therefore, the assessee has committed a default within the meaning of section 271(1) (b) of the
Act. Hence, ld. CIT (A) as well as the AO were justified in levying penalty under section 271(1) (b) of the
Act.
We have heard the rival submissions of both the parties and have perused the material available
on record. We find that the assessee has not complied with the notice as it was sent on wrong postal
address at G/S Old Police Colony behind Civil Court Bhopal whereas assessee`s correct address was G/5
old Police Colony behind Civil Court Bhopal. The Ld. A.R. has filed copy of bank pass book of Bank of
Baroda, giving postal address as G/5 Old Police Line. Which supports his contention of correct address.
Therefore, there was reasonable cause for non-compliance of the notice. We also note that the
assessee has made all efforts to obtain and submit the information as and when it came to his
knowledge and accordingly received the penalty order from Department by hand and made reply before
the Ld. CIT (A) . Thus, the counsel of the assessee had appeared before the CIT(A) after receiving penalty
order by hand from Department and not because the notice was received by postal address by the
assessee. Therefore, we are of the view that this constituted the reasonable cause. In view of these
facts and circumstances, we are of view that the AO was not justified in levying of penalty u/s 271(1) (b)
of the Act. In view of this matter, we cancelled the penalty levied under section 271(1)(b) of the Act.
Accordingly, the grounds of appeal of the assessee is allowed.
In the result, the appeal of the assessee stands allowed.
The order pronounced in the open Court on 20.03.2017
Sd/- Sd/-
(सी.एम.गग�)/(C.M. GARG) (ओ.पी.मीना) /(O.P.MEENA) �या�यक सद�य /JUDICIAL MEMBER लेखा सद�य /ACCOUNTANT MEMBER Dated 20.03.2017/op