2022 (12) TMI 798 - AT - Income Tax

Penalty u/s 271(1)(b) - non-compliance of the notices - assessee did not participate in the assessment proceedings and ex parte order u/s 144 was passed - assessee was not aware of uploading of the impugned order of the NFAC/ld.CIT(A) - HELD THAT - Director Shri Bhavesh Chhatbar was all the while available, having received all orders passed i.e. assessment order under section 144 of the Act and penalty order u/s 271(1)(b) of the Act and the order of the NFAC/ld.CIT(A) in penalty proceedings, having repeatedly filed appeals before the higher forums against the said orders. There is no reason why the notices remained unresponded to. When the director of the assessee company, Shri Bhavesh Chhatbar, could have responded to the orders passed repeatedly, he could very well have responded to the notices also, and the statement made on behalf of the assessee that the directors were all absconding, therefore, appears to be totally false. Even before us, we find that after filing of the appeal, nobody has appeared. This appears to be a repeated pattern being adopted by the assessee to misuse the due process of law. We therefore see no reason to differ from the NFAC/ld.CIT(A) s finding and accordingly uphold the order of the NFAC/ld.CIT(A) confirming the levy of penalty under section 271(1)(b) of the Act of Rs.30,000/-. The grounds of appeal of the assessee are rejected.

Summary

Issues:
- Delay Condonation for filing appeal
- Ex parte adjudication due to non-appearance of the assessee
- Levy of penalty under section 271(1)(b) of the Income Tax Act, 1961

Delay Condonation for filing appeal:
The appeal filed by the assessee against the penalty imposed under section 271(1)(b) was initially considered barred by limitation due to a 31-day delay. The assessee sought condonation of delay, citing reasons such as lack of awareness of the order and engagement in tax audit report filing. The Tribunal, considering an extension of the limitation period by the Apex Court, condoned the delay and accepted the appeal for adjudication.

Ex parte adjudication due to non-appearance of the assessee:
Despite multiple opportunities, the assessee did not appear before the Tribunal, leading to an ex parte adjudication. The Tribunal proceeded with the adjudication after hearing the submissions of the ld. DR and considering the available materials on record.

Levy of penalty under section 271(1)(b) of the Income Tax Act, 1961:
The sole issue in the appeal was the levy of a penalty amounting to Rs.30,000 under section 271(1)(b). The assessee contended that non-compliance was due to financial problems and absconding directors. However, the AO did not accept these reasons and imposed the penalty. The NFAC/ld.CIT(A) upheld the penalty after the assessee failed to respond adequately during the proceedings. The Tribunal noted the pattern of non-compliance by the assessee and upheld the penalty, rejecting the grounds of appeal. The appeal was ultimately dismissed, affirming the penalty levy.

This detailed analysis covers the issues of delay condonation for filing appeal, ex parte adjudication due to non-appearance of the assessee, and the levy of penalty under section 271(1)(b) of the Income Tax Act, 1961, as addressed in the judgment by the Appellate Tribunal ITAT Rajkot.