2022 (3) TMI 875 - AT - Income Tax

Penalty u/s 271(1)(b) - non compliance of notices u/s 142(1) - HELD THAT - As it was clear from the provisions of Section 271(1)(b) that this provision can be invoked only for non compliance of notice u/s 115WD (2) or Section 115WE(2) or Section 142(1) or 143(2) or directions issued u/s 142(2A) - Therefore other than the default committed by the assessee specified in the clause (b) of section 271(1) the non compliance to the other notices or directions would not attract the penalty u/s 271(1)(b) - Accordingly the penalty levied u/s 271(1)(b) for non compliance of notice the same was not served with any of the notices issued by the AO due to the change of address. Penalty levied for non compliance of notice u/s 142(1) - Tribunal opined that the assessee was not served with any of the notices issued by the AO due to the change of address - we have perused the documentary evidence of assessee s Aadhar Card for the change of address and Affidavit of the assessee dated 14.02.2022 in which there was reasonable cause principle. As regards the penalty levied for non compliance of notice u/s 142(1) of the Act. In our considered opinion that the assessee was not served with any of the notices issued by the AO due to the change of address and since the assessee had not filed any return of income. Therefore the AO was not having the present address of the assessee - when the notice issued u/s 142(1) was not served upon the assessee and the AO had not conducted further enquiry regarding the current address of the assessee then in the facts and circumstances of the case that the assessee had already furnished the current address in his letter dated 23.08.2021 the reasons explained by the assessee were bona-fide and reasonable - we set aside the order passed by CIT(A) and the penalty imposed u/s 271(1)(b) of the Act for non compliance of Section 142(1) is deleted. Appeal of assessee allowed.

Summary

Issues:
Penalty under section 271(1)(b) of the Income Tax Act, 1961 for assessment year 2014-15.

Analysis:
1. The appeal was against the penalty order passed under section 271(1)(b) of the Income Tax Act, 1961 for the assessment year 2014-15. The assessee raised grounds challenging the penalty imposed by the Assessing Officer, seeking its deletion.

2. The case involved the non-compliance of notices issued to the assessee under various sections of the Act. The Assessing Officer initiated penalty proceedings under section 271(1)(c) for furnishing inaccurate particulars of income and concealing income, leading to the issuance of penalty notice under section 271(1)(b) read with section 274.

3. The CIT(A) upheld the penalty order, noting that the assessee did not dispute the facts mentioned in the penalty order and failed to provide any valid reasons for non-compliance with the notice issued under section 142 of the Act.

4. In the appeal before the Tribunal, the assessee contended that due to address changes, notices were not received promptly, affecting compliance. The Tribunal considered documentary evidence, including Aadhar Card and an affidavit, to establish the change of address and the reasonable cause for non-compliance.

5. The Tribunal observed that the penalty under section 271(1)(b) could only be imposed for non-compliance with specific notices mentioned in the Act. Since the assessee was not served with the notice under section 142(1) due to address change, the penalty for non-compliance of that notice was deleted.

6. The Tribunal found that the assessee had provided a current address in a letter, and the reasons for non-compliance were genuine. Therefore, the penalty imposed under section 271(1)(b) for non-compliance with section 142(1) was set aside, and the appeal of the assessee was allowed.