2022 (11) TMI 1052 - AT - Income Tax

Penalty imposed u/s 271(1)(b) - default in not responding to the notice issued u/s 142(1) - allegation of non-service of notices - HELD THAT - Assessee was completed u/s 144 r.w.s. 153C of the Act which clearly shows that the Assessing Officer completed the said assessment for best of his judgment in the absence of assessee u/s 144. On careful reading of the ITAT s order in the case of M/s. Sterlight Fincom Pvt. Ltd. 2022 (9) TMI 1391 - ITAT NAGPUR which held when there is no notice properly served on the assessee, there can be no question of imposing or confirming any penalty u/s 271(1)(b) of the Act and ordered to delete the penalty impose thereof. Thus findings of Tribunal is applicable to the facts of the present case on hand and by applying the same hold that the Respondent-Revenue could not show any evidence establishing that the notices were served on the assessee properly. Thus, a penalty u/s 271(1)(b) of the Act as confirmed by the CIT(A) is set-aside. Thus, grounds of appea raised by the assessee are allowed.

Summary

Issues involved:
Appeals against common order dated 02.05.2017 passed by CIT(A)-3, Nagpur for assessment years 2002-03 to 2008-09.

Detailed Analysis:

Issue 1: Penalty imposed u/s 271(1)(b) of the Act
- The assessee, a company subjected to search, faced penalty proceedings for non-compliance with notices.
- Assessing Officer initiated proceedings under section 153C by issuing notices, including one under section 271(1)(b) for non-response to earlier notices.
- CIT(A) confirmed the penalty based on remand report stating notices were issued to an individual associated with the assessee.
- Assessee argued no notices were served, citing a tribunal's order in a similar case where penalties were deleted due to improper notice service.
- Tribunal found no evidence of proper notice service to the assessee, following the precedent to set aside the penalty confirmed by CIT(A).

Issue 2: Applicability to other appeals
- Decision on the first appeal applied mutatis mutandis to six other appeals by the assessee for assessment years 2003-04 and 2008-09.
- All seven appeals were allowed based on the findings in the initial appeal.

In conclusion, the Tribunal allowed all seven appeals by the assessee, setting aside the penalty imposed under section 271(1)(b) of the Act due to lack of evidence of proper notice service. The decision in the first appeal regarding notice service was applied to the remaining six appeals, resulting in a favorable outcome for the assessee in all cases.