AJMAIR SINGH BHULLAR,AMRITSAR vs. DCIT, CIRCLE-1, INTERNATIONAL TAXATION, CHANDIGARH

Briefly the facts of the case are that the assessee is a Non- Resident Indian. Proceedings u/s 147 were initiated in this case by issuance of notice u/s 148 dated 31.03.2021. In response, the assessee filed his return of income declaring total income of Rs.2,76,272/- on 29.04.2021. Thereafter, notice u/s 142(1) alongwith questionnaire dated 29.08.2021 and 07.09.2021 were issued to the assessee. Subsequently, a Show Cause Notice dated 03.03.2022 was also issued to the assessee. In response to all these notices, there was no compliance on the part of the assessee. Thereafter, given the non-compliance from the assessee, penalty proceedings u/s 271(1)(b) were initiated and notice u/s 271B read with Section 274 was issued to the assessee. In response to said notice also, there was no compliance. Thereafter, another notice was issued on 11.08.2022 which also remained un-complied with. Thereafter, the AO proceeded in the matter and held the assessee to be in default and held that it is a fit case for imposition of penalty u/s 271(1)(b) of the Act and penalty amounting to Rs.20,000/-

Being aggrieved, the assessee carried the matter in appeal before the ld. CIT(A) who has since passed the impugned order dismissing the appeal of the assessee. Against the said order, the assessee is in appeal before us.

During the course of hearing, the ld. AR submitted that the assessment was completed ex-parte u/s 144 by the AO and none of the notices issued during the assessment and also the assessment order was served on the assessee. It was submitted that the assessee was out of India and he was not aware of the assessment proceedings being initiated and completed in his case. It was further submitted that the ld. CIT(A) decided the appeal against the assessee by issuing only one notice of hearing dated 12.02.2024 against which the assessee sought an adjournment and instead of adjourning the matter, the ld. CIT(A) passed the impugned order dated 29.03.2024. In light of the aforesaid, it was submitted that the assessee be allowed an opportunity to represent his case and the matter may be remanded back to the file of the ld. CIT(A) for fresh adjudication on merits after providing reasonable opportunity to the assessee.

Per contra, the ld. DR is heard who has relied on the order of the ld. CIT(A) as well as that of the AO and it was submitted

We have heard the rival contentions and purused the material available on record. Admittedly, the assessee is a NRI and as claimed, the assessee was out of India during the relevant period and he was not aware of the assessment proceedings being initiated and various notices being issued to him. We find that the said claim of the assessee need to be verified before levy of penalty for non-compliance to the notices issued by AO u/s 271(1)(b) of the Act. The ld CIT(A) has decided the appeal ex- parte qua the assessee and apparently, one notice has been issued in respect of which the assessee has sought adjournment, thereafter the ld CIT(A) has passed the impugned order. There is thus lack of effective opportunity being granted to the assessee. In the facts and circumstances of the case, we therefore deem it appropriate to set-aside the matter to the file of the ld CIT(A) to decide the same afresh as per law after providing reasonable opportunity to the assessee.