2023 (9) TMI 248 - AT - Income Tax

Levy of penalty u/s. 271(1)(b) - non-compliance of notice issued u/s. 142(1) and not sought for any adjournment of the hearing - Assessee argued for pendency of the quantum appeal - HELD THAT - It is undisputed fact for the AY 2011-12 assessment was completed ex-parte by passing Best Judgment Assessment u/s. 144 r.w.s. 147 by the AO - For non-compliance of notice u/s. 142(1), the A.O. has levied penalty u/s. 271(1)(b) of the Act. The assessee neither offered any explanation for non-compliance of the notice issued u/s. 142(1) nor sought for any adjournment of the hearing of the case. No reasons to interfere with the levy of penalty u/s. 271(1)(b) of the Act. Thus the grounds raised by the assessee are devoid of merits and the same is hereby dismissed. Levy of penalty u/s. 271F - assessee has filed the Return of Income after issuance of notice u/s. 148 of the Act, even though the taxable income of the assessee is higher, who is liable to file regular Return of Income u/s. 139(1) - HELD THAT - The assessee offered no explanation before any of the lower authorities for non-filing of regular Return of Income. Therefore the assessee is liable to levy of penalty u/s. 271F of the Act. Thus the grounds raised by the assessee are devoid of merits and the same are rejected. Assessee appeals dismissed.

Summary

Issues involved:
The issues involved in this case are the levy of penalties under section 271(1)(b) of the Income Tax Act, 1961 for non-compliance with notices u/s. 142(1) and the levy of penalty under section 271F of the Act for failure to file the Return of Income for the Assessment Year 2011-12.

Penalty under section 271(1)(b) - Non-compliance with notices u/s. 142(1):
The appellant, an individual, did not file the Return of Income for the Assessment Year 2011-12, leading to reassessment proceedings initiated by the Assessing Officer. Despite multiple notices and opportunities, the appellant failed to comply with the notice issued u/s. 142(1). The Assessing Officer imposed a penalty of Rs. 10,000 under section 271(1)(b) due to the deliberate disregard shown by the appellant towards the statutory notice. The appellant's requests to keep the penalty proceedings in abeyance pending a quantum appeal were rejected as they were deemed irrelevant to the non-compliance issue. The CIT(A)-NFAC upheld the penalty, stating that the penalty was imposed for non-compliance with notices and not for income suppression, hence dismissing the appellant's appeal.

Penalty under section 271F - Failure to file Return of Income:
The appellant also failed to file the Return of Income as required under section 139(1) for the Assessment Year 2011-12. The Assessing Officer initiated penalty proceedings under section 271F for this non-compliance. The appellant's request to keep the penalty proceedings in abeyance due to a pending quantum appeal was rejected, and a penalty of Rs. 5,000 was imposed for the failure to file the return within the specified time frame. The CIT(A)-NFAC confirmed this penalty, emphasizing that opting for the Vivad Se Vishwas Scheme for the quantum appeal did not grant immunity from the penalty under section 271F for the technical default of filing the return after the due date.

Judicial Decision:
The appellate tribunal dismissed the appeals filed by the appellant against the penalties imposed. The tribunal noted the appellant's repeated failure to provide explanations for non-compliance with statutory notices and non-filing of the Return of Income. The tribunal rejected the appellant's requests for adjournments and found no valid reasons to interfere with the penalties imposed by the Assessing Officer. Consequently, the tribunal upheld the penalties under sections 271(1)(b) and 271F, stating that the appellant's grounds for appeal were devoid of merit.