PRAVIN SAWANT,THANE vs. ITO WD 3(4), KALYAN

The present appeal has been preferred by the assessee, against the order dated 29.05.2014 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2005-06, agitating the levy of penalty under section 271(1)(b) of the Act.

The brief facts of the case are that the assessee filed return of income declaring total income of Rs.90,000/- for the assessment year under consideration. The case was selected for scrutiny and accordingly notice under section 143(2) was issued and served on the assessee on 12.05.10. However, since there was no compliance of the notice, another notice under section 143(2)/141 was served on the assessee on 03.10.10 calling to appear on 06.10.10 but none appeared. Thereafter, the Assessing Officer (hereinafter referred to as the AO) served notices on 23.10.10 for appearance on 28.10.10, dated 29.10.10 for appearance on 04.11.10 and finally dated 30.10.10 for 2 M/s. Pravin Sawant appearance on 08.11.10. Since none appeared on behalf of the assessee, the AO issued show cause for penalty under section 271(1)(b) of the Act. The AO thereafter completed the assessment ex-parte under section 144 read with section 147 of the Act. In the penalty proceedings under section 271(1)(b) of the Act, after hearing the Ld. Representative of the assessee, the AO imposed penalty of Rs.10,000/- for default in appearing before the AO. The Ld. CIT(A) confirmed the said penalty. The assessee is, thus, in appeal before us.

We have heard the rival contentions and have also gone through the records. The Ld. A.R. of the assessee has brought our attention to page-1 of the paper book which is the copy of the notice dated 08.01.10 under section 142(1) of the Act issued by AO Ward 26(2)(4), Charni Road, Mumbai. The assessee replied to the said notice vide letter dated 18.01.10 and stated that he has filed his income tax return with the AO of Ward 3(4) Kalyan. The assessee has further invited our attention to copy of notice dated 24.03.10 issued under section 148 of the Act by ITO Ward 26(2)(4) Mumbai. The assessee has also invited our attention to notice under section 142(1) of the Act dated 12.05.10 issued by ITO Ward 3(4), Kalyan to which the assessee has filed a reply dated 08.12.10 received under the stamp dated 14.12.10 by the ITO Kalyan. In the said reply, the assessee has not only explained the reasons for his non appearance before the AO on earlier dates stating that the concerned C.A. namely Mr. Rajesh Shah was not available for long time and therefore the matter was entrusted to another C.A. namely Mr. Pradeep Gupta. It was also explained that the return of income was filed with the ITO Kalyan and the same was processed under section 143(1). It was also stated that after the end of the relevant assessment year, no recourse can be taken under section 142(1) of the Act. However, the proper course was to issue the notice under section 148 of the Act and that the assessee was ready to comply and cooperate with the proceedings under section 148 on the same being initiated. We find that after the receipt of the reply dated 08.12.10, the AO passed the assessment

In the result, the appeal of the assessee is hereby allowed.