2022 (4) TMI 292 - AT - Income Tax

Penalty u/s 271(1)(c) - non compliance of notices u/s 142(1) - HELD 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) of the Act. Assessee was not aware about the assessment proceedings, so the assessment order passed by the Ld. AO u/s 144 on ex parte basis. All the notices were sent by the Income Tax Department at DAV Central School, Vaishali Nagar, Jaipur, where earlier assessee was in Job. But when the proceedings was undergone at that time assessee settled in Behror (Alwar) and the address of assessee is W/o Gaurishankar, Hamidpur Road, Behror, Alwar, Rajathan-301701 as per the Adhaar card also. We have perused the documentary evidence of assessee s Aadhar Card for the change of address and Affidavit of the assessee dated 13.10.2021 in which there was reasonable cause principle. Assessee was served with the notices issued by the AO which was not known by the assessee due to the change of addresses . Further considering the facts and circumstances of the case that the assessee had already furnished the current address in his letter dated 13.10.2021 , the reasons explained by the assessee were bonafide and reasonable before the CIT (A) and which was not taken in consideration We set aside the order passed by ld. 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:
Appeal against penalty order under section 271(1)(b) of the Income Tax Act, 1961 for AY 2008-09.

Detailed Analysis:

1. Assessment Proceedings and Penalty Initiation:
The case involved an appeal against a penalty order under section 271(1)(b) of the Income Tax Act, 1961 for the assessment year 2008-09. The assessment was reopened under section 147, and notices were issued to the assessee. The Assessing Officer (AO) proceeded with an ex-parte assessment under section 144 due to non-compliance by the assessee with the notices served. Subsequently, penalty proceedings were initiated under section 271(1)(b) for furnishing inaccurate particulars of income and concealing income.

2. Assessee's Grounds and Submissions:
The assessee contested the penalty imposition, claiming that she had no taxable income during the relevant year. The assessee argued that the notices were sent to a wrong address as she had moved, and thus, was unaware of the assessment proceedings. The assessee presented documentary evidence, including an affidavit and Aadhar card, to support the change of address. Case laws such as ABACUS were cited to support the argument that penalty imposition was unjustified.

3. CIT(A) Decision:
The CIT(A) upheld the penalty, noting that the AO had made efforts to serve notices at different addresses but the assessee had not updated her address with the department. The CIT(A) dismissed the grounds of appeal raised by the assessee, upholding the penalty of ?10,000.

4. Appellate Tribunal Decision:
The Appellate Tribunal reviewed the case and considered the documentary evidence provided by the assessee. It was observed that the penalty was imposed for non-compliance with notices under section 142(1) of the Act. The Tribunal found that the assessee's reasons for non-compliance were reasonable, given the change of address and the efforts made to inform the department. The Tribunal concluded that the penalty imposed was not justified and deleted the penalty under section 271(1)(b) of the Act.

5. Final Decision and Outcome:
In the end, the Appellate Tribunal allowed the appeal of the assessee, setting aside the CIT(A)'s order and deleting the penalty imposed under section 271(1)(b) for non-compliance with section 142(1). The decision was based on the bonafide reasons provided by the assessee and the lack of proper service of notices due to the address change.

This detailed analysis highlights the legal proceedings, arguments presented, judicial decisions cited, and the ultimate decision of the Appellate Tribunal in favor of the assessee.