2023 (6) TMI 82 - AT - Income Tax

Penalty u/s 271(1)(b) - non-compliance of notice u/s 142(1) - reasonable cause for non-compliance u/s 273B - HELD THAT - As no compliance on the date of hearing though notice was sent through Speed Post. However, it is observed that there is no finding by the AOthat any of the above notices was served on the assessee and the assessee did not comply. Even before us no evidence was furnished by the Revenue suggesting that the above notices were in fact served on the assessee and there was no compliance by assessee. Assessee submission that he was attending to his ailing father and no notice was served on him as he was not residing in the premises cannot be brushed aside in view of the death certificate of his father who passed away on 22.02.2018 and medical reports dated 18.05.2017 and 09.08.2017. All this goes to show that there is reasonable cause for non-compliance of the above notices even assuming they were served. This not a fit case for levy of penalty u/s 271(1)(b) - Decided in favour of assessee.

Summary

Issues involved:
The appeal against the penalty imposed under section 271(1)(b) of the Income Tax Act, 1961 for assessment year 2010-11.

Summary:
The assessee appealed against the penalty imposed by the Assessing Officer, which was confirmed by the ld. Commissioner of Income Tax (Appeals) at Rs. 40,000. The assessee argued that statutory notices were not served as the father was sick and eventually passed away, leading to the assessee's absence from the premises and lack of knowledge of the notices. The ld. Counsel contended that there were reasonable causes for non-compliance, as per Section 273B, which the ld. CIT (Appeals) failed to consider. The assessee provided explanations and evidence, including a death certificate and medical documents, to support the claim of non-compliance due to personal circumstances.

The Assessing Officer detailed the notices issued under section 142(1) and the lack of compliance by the assessee. However, there was no evidence that the notices were served on the assessee. The Tribunal observed that the assessee's reasons for non-compliance, related to attending to the ailing father and eventual demise, constituted a reasonable cause. Despite the lack of evidence of service of notices, the Tribunal held that there was sufficient cause for non-compliance, leading to the decision that the penalty under section 271(1)(b) should be deleted. The appeal of the assessee was allowed, and the penalty was directed to be deleted.

The decision was pronounced on 29/05/2023 by the Appellate Tribunal ITAT DELHI, with President Shri G. S. Pannu and Judicial Member Shri Challa Nagendra Prasad presiding over the case. The ld. Counsel for the assessee and the Department representatives presented their arguments, leading to the Tribunal's decision in favor of the assessee.