2023 (11) TMI 122 - AT - Income Tax

Levy of penalty u/s 271(1)(b) - non-compliance of the statutory notices issued by AO u/s 142(1) - HELD THAT - Since the Ld. NFAC has categorically observed that the assessee failed to furnish reasons for non-compliance of the statutory notices issued by the AO - Further the assessee has not filed her Return of Income u/s. 139(1) - also in response to the reopening of notice u/s. 148 issued, the assessee failed to furnish the Return of Income and also not responded to the u/s. 142(1) notice two issued by the AO. Thus the assessee is in the habit of not complying to the statutory notices issued by the Authorities. As the assessee has not adduced any proof or reasons for non-compliance of the statutory notices, which has resulted in exparte assessment order. The assessee neither filed the Return nor responded to the notice which has resulted in levying penalty u/s. 271(1)(b) which in our considered opinion does not require any interference - Decided against assessee.

Summary

Issues Involved:
1. Non-compliance with statutory notices issued under Section 142(1) of the Income Tax Act, 1961.
2. Levy of penalty under Section 271(1)(b) of the Income Tax Act, 1961.

Summary:

Issue 1: Non-compliance with statutory notices issued under Section 142(1) of the Income Tax Act, 1961.

The assessee did not file her original Return of Income for the Assessment Year 2012-13 despite having made a Time deposit of Rs. 11 lakhs. The assessment was reopened by issuing a notice under Section 148 of the Act, but the assessee failed to respond. Subsequent notices under Section 142(1) were also ignored, leading to an ex-parte assessment order and the addition of Rs. 12,90,000/- to the total income of the assessee. The assessee argued that her non-compliance was not intentional or mala fide and that similar issues had been dealt with in earlier assessments. However, the Assessing Officer (AO) did not find the explanations satisfactory, noting that no relevant documents or genuine reasons for non-compliance were provided. The National Faceless Appeal Centre (NFAC) confirmed the penalty, observing that the non-compliance was deliberate and continuous, and that the assessee's failure to file the Return of Income or respond to statutory notices justified the penalty.

Issue 2: Levy of penalty under Section 271(1)(b) of the Income Tax Act, 1961.

The AO imposed a penalty of Rs. 10,000/- under Section 271(1)(b) for non-compliance with statutory notices. The assessee appealed, arguing that the penalty was unjustified as the non-compliance was due to a bona fide belief and inadvertent mistake. The NFAC dismissed the appeal, emphasizing that the assessee failed to provide any proof or genuine reasons for the non-compliance. The Tribunal upheld the NFAC's decision, noting that the assessee's habitual non-compliance with statutory notices warranted the penalty. The Tribunal found no merit in the assessee's arguments and dismissed the appeal.

Conclusion:

The Tribunal concluded that the assessee's continuous and deliberate non-compliance with statutory notices justified the penalty under Section 271(1)(b) of the Income Tax Act, 1961. The appeal filed by the assessee was dismissed, and the penalty order was confirmed.