2022 (4) TMI 1385 - AT - Income Tax

Penalty u/s. 271(1)(b) - assessment u/s 153C - Assessee argued AO had levied multiple penalties for non-appearance on three different dates without appreciating that there was neither proper service of notice nor was there any query - HELD THAT -. As could be seen, the AO issued only one notice u/s 274 read with Section 271(1)(b) in each of the three cases where penalty u/s 271(1)(b) was levied, for ay 2014-15, before prejudicing the assessee, which SCN itself is disputed by the assessee to have not been served on the assessee as the assessee has denied that he was never served with SCN s, which also touches upon the adherence to the principles of natural justice. It is also observed that tribunal passed a common order dated 16. 10. 2019, for ay 2012-13, 2013-14 and 2016-17, wherein penalty levied u/s 271(1)(b) by AO and confirmed/upheld by ld. CIT(A) stood deleted, but we have observed that factual matrix in the case before us for impugned assessment year 2014-15 differs from the facts as are emerging from records for ay 2012-13, 2013-14 and 2016-17, as in those years, there were no additions made by the AO while framing assessment u/s 153C read with Section 144 and the returned income stood accepted, while in the year under consideration viz. ay 2014-15, there are finding by the AO that there are incriminating material belonging to the assessee which was found during search operations conducted by Revenue in the case of Genus Group of cases, on 30. 07. 2015 u/s 132 of the 1961 Act, which has bearing on determination/computation of income of the assessee for ay 2014-15, and the AO wanted to confront assessee with the seized material, but the assessee did not co-operated with Revenue and no details were filed by the assessee, for ay 2014-15 in compliance to questionnaire/directions issued by the AO, which ultimately led to additions being made by the AO while framing quantum assessment for ay 2014-15. Even, the assessee did not appeared before the AO in response to summons issued by the AO u/s 131 of the 1961 Act. The appeal against quantum assessment filed by the assesse is pending before ld. CIT(A) for adjudication. Thus, the order dated 16. 10. 2019 passed by tribunal is clearly distinguishable on the facts. We are of the considered view in the impugned case before us one more opportunity be provided to assessee to bring on record complete details/evidences in support of its contentions. Thus, based on totality of facts and circumstances of the case, we are setting aside the matter to the file of ld. CIT(A) for fresh adjudication of the issue. Further, if advised, the assessee can file condonation application before ld. CIT(A) explaining sufficient cause, and it is for ld. CIT(A) to adjudicate the admissibility of appeal or otherwise, on merits in accordance with law. We clarify that we have not commented on the merits of the issue in these three appeals, for ay 2014-15, and all the contentions are kept open. Thus, the assessee s three appeal(s) for ay 2014-15, are allowed for statistical purposes.

Issues Involved:
1. Confirmation of penalty under Section 271(1)(b) of the Income-tax Act, 1961.
2. Non-compliance with notices issued under Section 142(1) of the Income-tax Act, 1961.
3. Alleged non-service of notices and show cause notices.
4. Delay in filing appeals and non-condonation of delay.
5. Consistency of tribunal decisions in similar cases for previous assessment years.

Issue-wise Detailed Analysis:

1. Confirmation of Penalty under Section 271(1)(b):
The assessee appealed against the confirmation of penalties under Section 271(1)(b) for non-compliance with notices issued under Section 142(1). The penalties were imposed for assessment years (AY) 2014-15 and 2015-16. The penalties were initially confirmed by the Commissioner of Income-tax (Appeals) [CIT(A)].

2. Non-compliance with Notices under Section 142(1):
The Assessing Officer (AO) issued several notices under Section 142(1) for AY 2014-15 and 2015-16, which the assessee allegedly failed to comply with. The AO issued penalty notices under Section 271(1)(b) due to non-compliance on multiple dates. The assessee argued that there was no proper service of notices and no queries were raised.

3. Alleged Non-service of Notices and Show Cause Notices:
The assessee claimed that the show cause notices (SCNs) issued under Section 274 read with Section 271(1)(b) were not served. The AO, however, claimed that the SCNs were served through email and speed post. The CIT(A) upheld the penalties, stating that the SCNs were duly served, and the assessee did not comply.

4. Delay in Filing Appeals and Non-condonation of Delay:
The CIT(A) dismissed the appeals on the grounds of delay in filing beyond the time prescribed under Section 249(2) of the Income-tax Act, 1961. The assessee did not file any application for condonation of delay. The tribunal noted that the assessee claimed to have received the penalty orders on 31.01.2019 and filed the appeals on 07.02.2019, which required proper adjudication.

5. Consistency of Tribunal Decisions in Similar Cases:
The assessee referred to a previous tribunal decision dated 16.10.2019 for AYs 2012-13, 2013-14, and 2016-17, where penalties under similar circumstances were deleted. The tribunal observed that the facts in the current case for AY 2014-15 differed as there were additions made based on incriminating material found during search operations, unlike in the previous years where returned income was accepted.

Tribunal's Decision:
The tribunal set aside the matter to the file of the CIT(A) for fresh adjudication, noting the need for a proper hearing and consideration of the assessee's claims regarding the service of SCNs and the delay in filing appeals. The tribunal allowed the appeals for statistical purposes, emphasizing the principles of natural justice and the need for a fair opportunity to the assessee to present its case.

Conclusion:
The tribunal allowed all six appeals filed by the assessee for AY 2014-15 and 2015-16 for statistical purposes, directing the CIT(A) to re-adjudicate the issues after considering the assessee's contentions and providing a fair hearing. The decision emphasized the importance of adhering to the principles of natural justice and ensuring that the assessee is given a proper opportunity to present its case.

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