2019 (8) TMI 53 - AT - Income Tax

Penalty u/s 271(1)(b) - non-compliance of the notices issued u/s 142(1) - HELD THAT - In terms of the section 142(1), AO called for certain information for completion of the assessment proceeding in the case of the assessee, but the assessee had not provided those information and continued to object the initiation of the proceeding in the case of the assessee. This conduct of the assessee led to completion of the assessment proceeding ex parte . In assessment proceedings, the role of the AO is both of the investigator and adjudicator. If the assessee obstruct and create hurdles in the investigation process of the Assessing Officer, true and complete facts may not be available for adjudication and the adjudication would be on incomplete facts. Not only the assessee stopped the Assessing Officer for examining the issue in dispute judiciously in assessment proceeding but also filed wrong information before the CIT(A) claiming that it had complied notices issued by the Assessing Officer. CIT(A) has pointed out one such instance of letter dated 18/02/2015 and observed that said letter bears no proof of submission before the Assessing Officer and appears to be an afterthought and crafted especially to wriggle out the penalty levied on it for non-compliance of notice under section 142(1) of the Act. Before us, the assessee has not represented and not rebutted this misconduct on the part of the assessee. The assessee has not made out a case of any reasonable cause for failure in furnishing the information before the Assessing Officer. - Decided in favour of assessee.

Summary

Issues Involved:
Penalty levied for non-compliance with notices under section 142(1) of the Income Tax Act, 1961 for assessment years 2007-08 to 2013-14.

Analysis:

Issue 1: Penalty Imposed for Non-Compliance with Notices
The appeals were against the penalty levied by the Assessing Officer for not complying with notices issued under section 142(1) of the Income Tax Act, 1961. The appellant contended that the penalty was imposed without reasonable opportunity and without considering the facts and circumstances of the case. The Assessing Officer initiated penalty proceedings as the appellant failed to comply with the notices despite multiple opportunities. The appellant challenged the penalty before the Ld. CIT(A), claiming compliance with the notices. However, the Ld. CIT(A) upheld the penalty, noting the appellant's deliberate evasion in responding to specific questions and obstructing the investigation process. The Ld. CIT(A) found the appellant's responses inadequate and upheld the penalty under section 271(1)(b) of the Act.

Issue 2: Lack of Representation by the Assessee
Despite notifications for hearings, the appellant did not attend or seek adjournments, indicating a lack of interest in prosecuting the appeal. The Tribunal proceeded ex parte due to the appellant's non-attendance. The lack of representation hindered the appellant's ability to present their case effectively and led to a one-sided adjudication process.

Issue 3: Adjudication Based on Incomplete Facts
The appellant's failure to provide necessary information obstructed the assessment proceedings, preventing the Assessing Officer from adjudicating on complete facts. By impeding the investigation process, the appellant hindered the Assessing Officer's ability to make a fair assessment. The Tribunal highlighted the importance of cooperation in assessment proceedings to ensure a thorough and just adjudication process.

Conclusion:
The Tribunal dismissed all appeals, upholding the penalty imposed for non-compliance with notices under section 142(1) of the Income Tax Act, 1961. The consistent evasion and lack of cooperation by the appellant were detrimental to the assessment process, leading to the affirmation of penalties across all assessment years. The decision emphasized the significance of providing complete and accurate information during assessment proceedings to facilitate a fair and informed adjudication process.