2021 (12) TMI 1137 - AT - Income Tax

Penalty u/s. 271(1)(b) - assessee failed to give reasons for non-compliance of statutory notice u/s. 142(1) - HELD THAT - We note that as rightly pointed by the ld. DR under scrutiny assessment proceedings the AO is required to issue notice u/s. 142(1) of the Act along with questionnaire seeking information regarding the subjects notified under scrutiny. The assessee has to comply the same, failing with the AO has power to exercise its jurisdiction to impose penalty u/s. 271(1)(b) of the Act for failure to furnish returns, comply with notices, concealment of income etc. In the present case, the AO initiated proceedings under clause (b) of sub-section (1) of section 271 of the Act for failure to comply with a notice issued u/s. 142(1) of the Act. As discussed above and also born out from the orders of both the authorities below, we note that till the disposal of appeal by the CIT(A) the assessee failed to furnish required evidences, information, documents, vouchers, etc. before the authorities below and in penalty proceedings no reasonable cause was shown for non-compliance of notice issued u/s. 142(1) - Therefore, we find support in the arguments of the ld. DR that the CIT(A) rightly confirmed the penalty imposed by the AO u/s. 271(1)(b) of the Act for non-compliance on the part of the assessee. Therefore, we find no infirmity in the order of CIT(A) and it is justified. Accordingly, the sole ground raised by the assessee is dismissed.

Summary

Issues:
- Justification of penalty under section 271(1)(b) confirmed by CIT(A)

Analysis:
1. The appeal was filed by the assessee against the order passed by the Commissioner of Income Tax (Appeals) for the assessment year 2012-13. The assessee did not appear, and the case was set ex-parte. The main issue was whether the CIT(A) was correct in upholding the penalty imposed by the Assessing Officer under section 271(1)(b) of the Income Tax Act.

2. The assessee, a private limited company engaged in various businesses, filed a return declaring a total income of ?39,510. During the assessment, the AO issued notices under section 142(1) of the Act, requesting compliance with the questionnaire. Despite multiple notices and opportunities, the assessee failed to produce the required records, documents, or books of accounts. The AO then issued a show-cause notice under section 271(1)(b) for non-compliance.

3. The CIT(A) issued several notices in the First Appellate proceedings, but the assessee did not respond or appear. The CIT(A) provided ample opportunities for the assessee to present its case, but no compliance was made. Consequently, the CIT(A) confirmed the penalty under section 271(1)(b) based on the non-compliance and lack of response from the assessee.

4. In the absence of any material supporting the grounds raised by the assessee, the Tribunal noted that the assessee failed to provide reasons for non-compliance with the statutory notice under section 142(1) of the Act. The Tribunal also observed that the assessee did not prosecute the grounds of appeal raised in the First Appellate proceedings. The Tribunal agreed with the arguments presented by the Revenue and upheld the CIT(A)'s decision to confirm the penalty.

5. After considering the arguments and evidence, the Tribunal found that the assessee repeatedly failed to comply with the notices and furnish the required information. The AO was justified in initiating penalty proceedings under section 271(1)(b) for non-compliance with the notice under section 142(1) of the Act. The Tribunal concurred with the decisions of the lower authorities and upheld the penalty imposed by the AO, as confirmed by the CIT(A).

6. Ultimately, the Tribunal dismissed the appeal of the assessee, stating that there was no infirmity in the order of the CIT(A) confirming the penalty under section 271(1)(b). The decision was based on the assessee's persistent non-compliance with the statutory notices and failure to provide necessary documents and explanations.