Loading judgment…
Facts
The assessee, a salaried individual, failed to appear for penalty proceedings under Section 271(1)(b) of the Income Tax Act, 1961. The penalty was levied based on the AO's finding that the assessee failed to respond to notices issued under Section 142(1). The assessee claimed non-receipt of notices as they were issued to an old address which had been sold prior to the notice date, and that they had shifted to Mumbai in 2006.
Held
The Tribunal held that the assessee had raised a specific plea of non-service of notices. Inquiry should have been conducted by the authorities, especially since the property used as the address was sold long before the notices were issued and the assessee's Form-16 would have contained the correct address. The facts and circumstances did not warrant the levy of penalty.
Key Issues
Whether the penalty under Section 271(1)(b) was sustainable when the assessee claimed non-receipt of notices due to service at an old, sold address, and if proper inquiry was conducted by the authorities.
Sections Cited
271(1)(b), 143(1), 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCHES: A : NEW DELHI
Before: SHRI S. RIFAUR RAHMAN & SHRI ANUBHAV SHARMA
Assessment Year: 2014-15 Vijay Joshi, Vs CIT(A), NFAC, A/702, Gokul Saphier, Delhi. Gokul Township, Next to Muljibhai Mehta School, Palghar Bolinji, Maharashtra – 401303, PAN: ABVPJ3676K (Appellant) (Respondent) Assessee by : None Revenue by : Shri Ajay Kumar Arora, Sr. DR Date of Hearing : 02.09.2025 Date of Pronouncement : .09.2025 ORDER
PER ANUBHAV SHARMA, JM:
This appeal is preferred by the assessee against the order dated 05.11.2024 of the Commissioner of Income-tax (Appeals), NFAC, Delhi (hereinafter referred to as the ld. First Appellate Authority or ‘the Ld. FAA’ for short) in Appeal No.NFAC/2013-14/10270944 arising out of the appeal before it against the order dated 25.08.2022 passed u/s 271(1)(b) of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’) by the ITO, Ward-1, Chittor (hereinafter referred to as the Ld. AO).
None appeared for the assessee at the time of hearing while notices have been issued on earlier occasion also. The ld. DR was heard. On perusal of the impugned order, we find that the assessee is having income from salary and assessed to income-tax for the last 25 years and, for the relevant year, had filed return declaring the total income at Rs.3,10,000/- and the said return was processed u/s 143(1) of the Act. The case of the assessee was reopened and notices were issued u/s 142(1) of the Act, but, assessee allegedly failed to respond for which penalty proceedings u/s 271(1)(b) were directed to be initiated. Subsequently, in penalty proceedings also the assessee failed to appear and the impugned order was passed. The assessee has taken a plea that non-submission of the reply was due to non-receipt of notice as he is working and living in Mumbai while notices were all issued at Chittorgarh. The assessee has claimed that the assessee has shifted to Mumbai in 2006.
We find that the ld.CIT(A) has considered the fact of e-assessment proceedings being conducted and notices being served through e-mail and, thus, was not inclined to accept the excuse given by the assessee by concluding that if the assessee was not checking periodically, it was his fault and the AO or the Department cannot be held responsible in any manner.
However, we are of the considered view that when the assessee has taken a specific plea that notices were not served, some sort of inquiry should have been done and before us on record, there is a letter of the assessee mentioning that the address on which the notices were served, 63-A, Bapu Nagar, Senthi, 2 Chittorgarh, was sold by the assessee long back on 03.12.2012 well before the notices were issued. In fact, it is pointed out in the written submissions that notice has been issued on 31.03.2021. Further, the assessee is a salaried employee and Form-16 had the address of the employee which could have been used for proper service of notice. Thus, the facts and circumstances did not warrant levy of penalty u/s 271(1)(b) of the Act. The appeal of the assessee is allowed. The impugned penalty is quashed. Order pronounced in the open court on 12.09.2025.