MADAN LAL JAT,RENWAL vs. ITO WARD 7(1) JAIPUR, JAIPUR

Rs.10,000/-: The ld. CIT(A) has grossly erred in law as well as on the facts of the case in confirming the penalty of Rs 10,000 u/s 271(1)(b) of the Act imposed by the ld. AO. The Ld. CIT(A) and AO have also erred in not considering the vital facts and material available on record in their true perspective and sense. Hence the penalty so made by the ld. AO and confirmed by the Id. CIT(A) is also being contrary to the real facts of the case and not according to the provision of law, hence the same may kindly be deleted in full.’’ 2.1 Brief facts of the case are that the AO imposed the penalty upon the assessee vide his order dated 07-09-2022 amounting to Rs.10,000/- u/s 271(1)(b) of the Act on the ground of failure to furnish or comply with notice u/s 142(1) dated 05-01- 2022 and non-furnishing of information called for vide notice on portal on various dates. It may be noted that that in spite of issuance of show cause penalty notice on 18-08-2022 fixing the date of hearing on 5-09-2022, the assessee had not submitted his reply and according to the AO it indicated that the assessee had deliberately made non-compliance thereof. Hence, the penalty was imposed upon the assessee amounting to Rs.10,000/- u/s 271(1)(b) of the Act. 2.2 Against the penalty order dated 09-07-2022, the assessee carried the matter before the ld CIT(A) who confirmed the action of the AO by observing as under:- 3….. In the Ist and 2ndgrounds the appellant confronted the legal validity of imposing penalty under section 271 (1)(b) of the Income Tax Act 3 MADAN LAL JAT VS ITO, WARD 7(1), JAIPUR 1961 and the factual and legal validity of passing the exparte order by the A.O without providing adequate and reasonable opportunity of being heard. After perusal of quantum assessment order and the penalty order passed by the A.O. it is found that assessee has never complied to the notices/show cause issued by the AO. The appellant failed to avail the opportunity to bring his view before the AO. The AO had no other option but to pass order u/s 144 of the Act on the basis of information available on record. During penalty proceedings also notice u/s 271(1)(b) was issued vide letter/notice dated 24/03/2022 for non-compliance of notice u/s 142(1) dated 05/01/2022 and non- furnishing of information called for. The appellant again remains non-compliant. The above fact shows that the appellant was given enough opportunity to bring in the valid reason for noncompliance. The penalty provision as mentioned above when the AO is satisfied that any person has failed to comply with notice under subsection (1) of section 142, such person shall pay by way of penalty. During appeal proceeding also the appellant did not provide any reason for noncompliance for notice u/s 142(1) dated 05/01/2022 or in support of his grounds. Even the appellant did not file statement of facts with Form No. 35 during the appeal proceedings. Therefore, the ground taken by the appellant has no merit, hence dismissed.

That also there was no mensrea/malafide intention for non compliance of assessing officer notices. I have come to know only when I had come at my Village in November 2022, and then I contacted to the Counsel at Jaipur, then he has applied for the certified copies of orders and documents and inspection of the assessment records on dt. 21.11.2022 to the ITO Ward 7(1), Jaipur, Copy of application is already filled. As we had received the certified copies of documents and orders on dt. 05.12.2022.

That due to all these reasonthe I could not make compliance of notice and the Id. AO nowhere provided any documentary proof that the notices were served on him. Hence we had requested to the Id. CIT(A) that "Therefore the Id. AO may kindly be asked to produce the documentary evidences of service of all the notices upon the assessee". Hence no penalty can be imposed.’’ 5 MADAN LAL JAT VS ITO, WARD 7(1), JAIPUR Further, the ld. AR of the assessee submitted that the appeal against the assessment order was pending where he had taken the ground of non-service of notices and the fate of quantum order may had direct impact on the present penalty order. Conclusively, the ld AR of the assessee prayed that the penalty confirmed by the ld.CIT(A) needs to be deleted for the reason that no service of notice by the AO u/s 142(1) was made available upon the assessee and there is no failure on the part of the assessee to comply with the notices if received by the assessee. 2.4 On the other hand, the ld. DR supported the order of the ld.CIT(A). 2.5 After hearing both the parties and perusing the materials available on record, the Bench noted that there was no service of notice to the assessee u/s 142(1) of the Act. Even the assessment is completed as ex-parte. The assessee in support of the contention filed an affidavit stating that there is no notice served as claimed by the department. The revenue could not controvert the contention raised before the lower authority and supported by an affidavit. Thus we feel that when the notice is not served under such condition then it was not possible for the assessee to comply with the same. Hence keeping in view the above facts and circumstances of the case as mentioned hereinabove, we do not concur with the findings of the ld CIT(A) which is dismissed. Thus the appeal of the assessee is allowed.