2022 (2) TMI 378 - AT - Income Tax

Levy of penalty u/s 271(1)(b) - non appearance before the Assessing Officer - no compliance was made by assessee to notice by A.O. served u/s 142(1) - HELD THAT - On perusal of records we find that on some instances notice were sent to the wrong address due to which the postal authorities could not deliver the document. A confirmation letter from the Postmaster of returning the speed post has been filed. Notice u/s 148 was served through affixture which was never received by the assessee as the address was not correct. AO kept an issuing notices on the wrong address even when the first notice was not served due to wrong address. All these series of facts shows that there was a mis-communication at the end of the AO about the address and also not mentioning the husband s name of the assessee which resulted in non serving of the notice since she resided in village - no justification in the action of the AO in initiating and levying penalty u/s 271(1)(b). We accordingly set aside the finding of the Ld. CIT(A) and delete the penalty levied u/s 271(1)(b). Ground raised by the assessee is allowed.

Summary

Issues:
Penalty under section 271(1)(b) for non-appearance in assessment proceedings.

Analysis:
The appeal was filed by the assessee against the order of the Ld. CIT(A)-2, Jalandhar for Assessment Year 2010-11, challenging the penalty imposed under section 271(1)(b) for non-appearance in the assessment proceedings. The assessee contended that the penalty was wrongly confirmed by the CIT(A) based on the grounds that no compliance was made to the notice served under section 142(1) and that the Postmaster certificate was undated. The case involved the issue of non-receipt of notices due to incorrect addresses and miscommunication on the part of the Assessing Officer.

The assessee's representative argued that the assessee was not served with the notice and submitted evidence to support the claim, including a certificate of the Postmaster. It was emphasized that the assessee did not intentionally avoid appearing before the Assessing Officer. The counsel presented a paper book containing relevant documents to support the case.

The Tribunal considered the arguments presented by both parties and examined the records. It was observed that notices were sent to incorrect addresses, leading to non-delivery by postal authorities. The confirmation letter from the Postmaster regarding the return of the speed post was taken into account. Additionally, it was noted that the notice under section 148 was served through affixture, which was not received by the assessee due to the incorrect address. The Assessing Officer continued issuing notices to the wrong address despite the initial non-delivery. The miscommunication regarding the address and failure to mention the husband's name of the assessee, who resided in a village, contributed to the non-service of the notice.

Based on the facts and circumstances of the case, the Tribunal found no justification for the Assessing Officer's decision to initiate and levy the penalty under section 271(1)(b) of the Act. Consequently, the Tribunal set aside the CIT(A)'s finding and deleted the penalty of Rs. 10,000 imposed on the assessee. As a result, the appeal of the assessee was allowed, and the penalty was revoked.

In conclusion, the Tribunal's decision highlighted the importance of proper communication and accurate address details in the context of serving notices in assessment proceedings. The case underscored the need for procedural fairness and adherence to legal requirements to ensure a just outcome in penalty imposition cases related to non-appearance before the Assessing Officer.