SH. PUNEET NARANG,BHARATPUR vs. ITO, WARD-1, BHARATPUR, BHARATPUR

ORDER PER: SANDEEP GOSAIN, JM This appeal filed by the assessee is directed against order of the ld. CIT(A) dated 16-04-2024, National Faceless Appeal Centre, Delhi [ hereinafter referred to as (NFAC) ] for the assessment year 2017-18 raising following solitary ground of appeal. ‘’The ld.CIT(A) has erred on facts and in law in confirming the levy of penalty of Rs.20,000/- u/s 272A(1)(d) of the I.T. Act, 1961.’’ 2.1 The only issue arose in the present appeal filed by the assessee is with regard to validity of penalty imposed under section 272A(1)(d) of the Income Tax Act. 2.2 I have heard the counsel for both the parties and I have also perused material placed on record, orders passed by the revenue authorities as well as judgement sighted by the respective parties. From the records I noticed that during the assessment proceedings notices under section 142 (1) of the Income Tax Act dated 10.06. 2019 and 4.07. 2019 were issued to the appellant however the appellant did not comply with the same. Accordingly the AO issued notice for imposition of penalty and after considering the reply filed by the Appellant as not plausible explanation imposed the penalty of Rs.20,000/- for non compliance on two occasions. I found that the revenue has imposed penalty for each default. But I am of the view that although the appellant had no reasonable cause for not appearing on different dates of hearing before AO in response to notice issued under section 143 (2) of the Income Tax Act however, default was same and, therefore penalty of Rs.10,000 could be imposed for first default made by the appellant in this regard only. As penalty under section 272A(1) (d) could not be imposed for each and every notice issued under section 143 (2), that remained not complied with, on the part of the appellant. The provisions of section 272A (1) (d) are of deterrent in nature and not for earning revenue, therefore, in case of failure of appellant to SHRI PUNEET NARANG VS ITO, WARD 1 , BHARATPUR comply with notice under section 143 (2), remedy with AO was framing of best judgement assessment under the provisions of section 144 and not to impose penalty under section 272A (1)(d) again and again. As in my view the penalty levied under section 272A(1)(d) was restricted to first default of appellant in not complying with notice under section 143 (2). In this regard I rely upon the decision in the case of Rekha Rani vs DCIT in Del/2013 where in it was held as under:- ‘’ Penalty-Non-compliance of notice-Imposition of Penalty- Only issue arose in Assessee's Appeal was with regard to validity of penalty imposed u/s. 271(1)(b) that was confirmed by CIT(A)-Revenue submitted that AO issued notice u/s. 143(2) on five different dates and Assessee failed to comply with same-Accordingly, AO invoked provisions of S. 271(1)(b) and imposed penalty for each default-Revenue submitted that Assessee had no reasonable cause for not appearing on date of hearing fixed before AO-Held, there was no reasonable cause on part of Assessee for not appearing on different dates of hearing before AO in response to notice issued u/s. 143(2)- However, default was same and, therefore, penalty of Rs. 10,000 could be imposed for first default made by Assessee in this regard only-Penalty u/s. 271(1)(b) could not be Imposed for each and every notice issued u/s. 143(2), that remained not complied with, on part of Assessee-Provision of S. 271(1)(b) was of deterrent nature and not for earning Revenue-In case of SHRI PUNEET NARANG VS ITO, WARD 1 , BHARATPUR failure of Assessee to comply with notice u/s. 143(2), remedy with AO was framing of "best judgement assessment" under provisions of S. 144 and not to impose penalty u/s. 271(1)(b) again and again-Penalty levied u/s. 271(1)(b) was restricted to first default of Assessce in not complying with notice u/s. 143(2)-Accordingly, penalty imposed was restricted to Rs. 10,000 as against Rs. 50,000 confirmed by CIT(A)-Appeal of Assessee partly allowed.’’ Further I rely upon the decision of ITAT Coordinate Bench in the case of Shri Sandeep Verms vs ITO (ITA No. 1167/JP/2019 for the assessment yeaer 2010-11 dated 09-01-2020) wherein it was held as under:- ‘’ We have considered the written submissions of the assessee as well as the arguments of the Id. D/R and carefully perused the impugned orders of the authorities below. There is no dispute that the assessee has neither filed any return of income nor appeared before the AO in response to the notice under section 148 as well as notices issued under section 142(1) of the Act. The AO has initiated the proceedings under section 271(1)(b) for non compliance of notices issued under section 142(1) of the Act. The details of the notices issued under section 142(1) as reproduced by the AO in para 1 of the penalty order are as under :- Notice u/s Date of issue Date of hearing Remarks 142(1) 29.06.2017 11.07.2017 Non-complied 142(1) 12.07.2017 19.07.2017 Non-complied 142(1) 25.07.2017 10.08.2017 Non-complied 142(1) 11.08.2017 22.08.2017 Non-complied In the assessment order, the AO has stated that a notice under section 142(1) along with the query letter was issued on 29.06.2017. Since there was no compliance by the assessee to the said notice, therefore, again a notice under section 142(1) was issued on 12th July, 2017. Similarly, the AO again issued two more notices under section 142(1) on 25.07.2017 and 11.08.2017. All these notices under section 142(1) were issued by the AO seeking the same information from the assessee, therefore, once the assessee has committed a default of non- compliance of the Information sought by the AO then issuing repeated notices by the AO seeking same information would not multiply the default. Therefore, even if the AO issued 4 notices under section 142(1) but the information sought in all these notices was the same, then it would constitute only one default. As regards the explanation of the assessee for explaining the cause of non-compliance, we find that except the last notice dated 11.08.2017, the earlier 3 notices issued by the AO under section 142(1) were issued prior to the date of alleged transfer on 03.08.2017. Therefore, the said explanation of the assessee is without any substance or merits. Hence, in the facts. and circumstances of the case, we restrict the penalty levied under section 271(1)(b) of the Act to one default as against 4 defaults treated by the AO. Accordingly, the penalty under section 271(1)(b) of the I.T. Act is confirmed to the extent of Rs.10,000/-.