VINEET KUMAR,NEW DELHI vs. ITO WARD - 50(1), NEW DELHI

This appeal is filed by the assessee against the order of the ld. Commissioner of Income Tax (Appeals)-17 [hereinafter referred to CIT (Appeals)] New Delhi, dated 29.05.2019 for assessment year 2010-11.

The assessee has raised the following substantive ground of appeal:- “On the facts and in the circumstances of the case and in law the ld. CIT (Appeals) erred in confirming the penalty imposed by the Assessing Officer under section 271(1)(b) of the Income Tax Act, 1961 to the extent of Rs.40,000/-.”

The ld. Counsel for the assessee submits that the statutory notices mentioned above were never served on the assessee; that the father of the assessee was severely sick; that the father of the assessee eventually passed away at the relevant time; and that due to the absence of the assessee from the premises the notices issued by the AO remained unserved on him and so the assessee had no knowledge of the fixation. Considering the explanation as stated above the Ld. CIT (Appeals) reduced the penalty to Rs.40,000/- instead of Rs.50,000/- as originally imposed by the AO vide his order dated 26.06.2018.

The Ld. Counsel submits that Ld. CIT (Appeals) observed that "Section 273B does provide that penalty is not to be imposed if the assessee has reasonable cause for non- compliance." Thus, even according to the Ld. CIT (Appeals), if there was a reasonable cause for non-compliance, there would be room u/s 273B of the Act not to impose any penalty. The Ld. CIT (Appeals) observed in para 6.6 of the impugned order that "I find that the assessee has failed to explain the reasons for non-compliance" which observation is 2 apparently wrong because in the order at para 6.3 the causes cited by the assessee for non-compliance are duly reproduced by the Ld. CIT (Appeals) herself which all seem to have been ignored by her subsequently while passing the order.

The ld. Counsel further submits that in view of the fact that the Ld. CIT (Appeals) has omitted to note the reasonable cause as pleaded before her and has confirmed the penalty by observing that assessee has failed to explain the reason for non-compliance, the order of the Ld. CIT (Appeals) is apparently misdirected and wrong. That apart the non-receipt of notices being an adequate cause for non-compliance which the Ld. CIT (Appeals) has failed to recognise, the further fact of the preoccupation of the assessee in attending to his ailing father with the eventual demise of his father are all further facts constituting sufficient cause for condoning the penalty which has been missed out by the Ld. CIT (Appeals). It was submitted that the ground as raised be allowed and the penalty of Rs.40,000/- imposed u/s 271(1)(b) of the Act be deleted.

The ld. Counsel for the assessee placed a paper book containing written submissions before the ld. CIT (Appeals) and death certificate together with medical documents and also relied on the decision of the co-ordinate bench of the Tribunal in the case of Harvinder Singh Jaggi Vs. ACIT [(2014) 48 taxmann.com 121 (Delhi–Trib)]. 7. On the other hand, the ld. DR relied on the orders of the authorities below.

Heard rival submissions perused the orders of the authorities below. We observe that the Assessing Officer in the penalty order given the summary of statutory notices issued and compliance thereof as under:-