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Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: Shri Waseem Ahmed & Shri T.R. Senthil Kumar
Gulamhusen The Income Tax Remanbhai Selat Officer, B/H, Somnath Takies, Vs Ward-4, Veraval, Garib Nawaz Colony, Veraval Veraval (Gir Somnath) (Respondent) PAN:BUMPS2730J (Appellant) Assessee Represented: Shri R.D. Lalchandani, A.R. Revenue Represented: Shri B.D. Gupta, Sr.D.R. Date of hearing : 29-03-2023 Date of pronouncement : 17-05-2023 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-
This appeal is filed by the Assessee as against the Appellate order dated 13.10.2022 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “NFAC”), confirming the levy of penalty under section 271(1)(b) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year (A.Y) 2013-14.
Page No 2 Shri Gulamhusen Remanbhai Selat vs. ITO
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.
2.1. The Revenue had information that the assessee has made cash deposit of Rs. 91,72,000/- in his saving bank account maintained with the Axis Bank and business transaction in commodities exchange, but not filed Returns of Income. Hence a notice u/s. 148 was issued 23.03.2020 by the Jurisdictional Assessing Officer (JAO) requiring the assessee to file the Return of Income within 30 days service of notice. There was no compliance to the above notice by the assessee. Hence a notice u/s. 142(1) with questionnaire was issued by the JAO on 22.09.2020 fixing the case for hearing on 30.09.2020.
2.2. Later the case was transferred to Faceless Assessment Scheme and a letter was issued on 11.07.2021 for registration on the e- filing portal. Again, there was no compliance by the assessee. Thereafter another notice u/s. 142(1) alongwith questionnaire was issued and serviced on the assessee (on the e-mail provided by the assessee) on 17.08.2021 fixing compliance on or before 23.08.2021. Again, the assessee did not response to the above notice. Therefore Page No 3 Shri Gulamhusen Remanbhai Selat vs. ITO with the materials available on record and an exparte assessment order was passed determining the assessed income as Rs. 9,98,320/- and demanded tax thereon.
2.3. Thereafter the Assessing Officer initiated penalty proceedings invoking section 274 read with section 271(1)(b) of the Act for non- compliance to the statutory notices issued u/s. 142(1) on 22.09.2020 & 17.08.2021. The assessee replied that his income has not exceeding the minimum amount and therefore not liable to tax. He did not received the so called notices, so he could not reply to the above notices. In fact as against the exparte assessment order, an appeal is filed before Ld. CIT(A) and the same is pending disposal and the requested to keep the penalty proceedings in abeyance. However the Assessing Officer levied penalty of Rs. 20,000/- for non-compliance to the notices issued u/s. 142(1) on 22.09.2020 & 17.08.2021.
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.