SHRI GULAMHUSEN REMANBHAI SELAT,VERAVAL (GIR SOMNATH) vs. THE INCOME TAX OFFICER, WARD-4, VERAVAL, VERAVAL

The brief facts of the case is that the assessee is an individual who was working as Office Assistant with one Soheb Noormohmad Soparia who was running businesses under the names of M/s. Paras Sea Food and M/s. Riyaz Traders. The assessee was also involved in the business of trading in commodities with a turnover of Rs. 6,67,318/-. The assessee was getting a salary by way of cash of Rs. 5,000/- for the above firms. Since the income of the assessee is below the taxable limit, the assessee has not filed the Return of Income.

Aggrieved against the same, the assessee filed an appeal before Ld. NFAC. The assessee again reiterated that he was not been served with the notices issued u/s. 142(1). The assessee further submitted that the cash deposit in Axis Bank not belong to him, but the money belong to Mr. Soheb Noormohmad Soparia who used to deposit cash in his account and then transferred this amount to his two other Concerns. Thus the Assessee has not received any money from the two firms of Mr. Soheb Noormohmad Soparia. Therefore the assessee claimed that he was being defrauded by Mr. Soheb Noormohmad Soparia and requested to drop the penalty proceedings u/s. 271(1)(b) of the Act. The Ld. NFAC considered the Page No 4 Shri Gulamhusen Remanbhai Selat vs. ITO submissions of the assessee and held that the assessee has not given ‘reasonable cause’ for failure to comply with the above notices. Therefore confirmed the levy of penalty u/s. 271(1)(b) of the Act and thereby dismissed the assessee’s appeal.

Aggrieved against the same, the assessee is in appeal before us. With the Solitary ground that the Ld. CIT(A) erred in levying a penalty u/s. 271(1)(b) of the Act. At the time of hearing of the appeal, the ld. Counsel submitted that the quantum appeal and service of notices are still pending before Ld. National Faceless Appeal Centre (NFAC) and therefore requested to wait for the outcome of the quantum appeals, which proves that the additions are unjustifiable in law.

Per contra, the Ld. Sr. D.R. appearing for the Revenue submitted that the quantum appeal has no relevance as far as the levy of penalty u/s. 271(1)(b) of the Act is concerned. Therefore the levy of penalty is liable to be confirmed as done by the lower authorities.

We have given our thoughtful consideration and perused the materials available on record. As it can be seen from the assessment order which is an exparte assessment order and the assessee also repeatedly states that he is not been served with the u/s. 148 notices, well as u/s. 142(1) notices by the Revenue. However, the quantum appeal is still pending before Ld. NFAC. Therefore in the interest of Natural Justice, the impugned order passed by Ld. CIT(A)-NFAC is hereby set aside and restored to the file of the Ld. NFAC with a direction to dispose of the penalty Page No 5 Shri Gulamhusen Remanbhai Selat vs. ITO appeal alongwith the quantum appeal pending before it. With this observation, the appeal filed by the Assessee is partly allowed.

In the result, the appeal filed by the Assessee is partly allowed for statistical purpose.