2015 (10) TMI 1308 - AT - Income Tax

Penalty under section 271F and 271(1)(b) - non-compliance of notices under section 153C as well as 142(1) and 143(2) - Held that - CIT(A) dismissed the appeals of the assessee exparte without giving proper and sufficient opportunity of being heard and since the assessee was not well during the course of penalty proceedings, he has not got an effective opportunity to offer his explanation for noncompliance to the notices issued under section 153C as well as 142(1) and 143(2) Keeping in view of the facts of the case and the submissions made by the Ld. Counsel for the assessee, we consider it fair and proper and in the interest of justice to give one more opportunity to the assessee to offer his explanation for the non-compliance of notices under section 153C as well as 142(1) and 143(2). Accordingly, the impugned orders of the Ld. CIT(A) confirming the penalties imposed by the A.O. under section 271F and 271(1)(b) for the years under consideration are set aside and the matter is remitted back - Decided in favour of assessee for statistical purposes.

Summary

Issues:
Penalty under section 271F for A.Ys. 2007-08 and 2008-09
Penalty under section 271(1)(b) for A.Ys. 2003-04, 2007-08 and 2008-09

Penalty under section 271F for A.Ys. 2007-08 and 2008-09:
The assessee, an individual, faced penalty under section 271F for non-compliance with notices issued under section 153C for A.Ys. 2007-08 and 2008-09. The penalty was imposed by the A.O. as the assessee failed to furnish any explanation during the penalty proceedings. The Ld. CIT(A) confirmed the penalties after the assessee did not comply with the hearing notices. The Tribunal noted the lack of proper opportunity for the assessee to explain the non-compliance and remitted the matter back to the Ld. CIT(A) for a fresh hearing, instructing the assessee to cooperate fully.

Penalty under section 271(1)(b) for A.Ys. 2003-04, 2007-08 and 2008-09:
The A.O. imposed penalties under section 271(1)(b) for non-compliance with notices under sections 142(1) and 143(2) for the mentioned assessment years. The penalties were upheld by the Ld. CIT(A) after the assessee failed to attend the hearings. The Tribunal, considering the submissions of the assessee's counsel, found that the assessee was not given adequate opportunity to present explanations. Consequently, the Tribunal set aside the penalties and directed the Ld. CIT(A) to reevaluate the case after affording the assessee a fair hearing opportunity.

This judgment highlights the importance of providing a fair chance to the assessee to present their case and offer explanations before imposing penalties for non-compliance with statutory notices. The decision emphasizes the principles of natural justice and the need for proper procedural adherence in penalty proceedings under the Income Tax Act, 1961.