2023 (9) TMI 323 - AT - Income Tax

Penalty u/s 271(1)(b) - non compliance to statutory notice u/s 143(2) - earlier two notices were sent by AO by way of physical mode, however, other two notice u/s 142(1) later were sent to assessee through e-mail - assessee was in the hope that other notices would also be sent by way of physical mode, thus has not checked her e-mail portal to see the notices, but as soon as the assessee checked her e-mail assessee found that notice u/s 142(1) took the print out of two notices and submitted her reply before the AO - HELD THAT - As in response to notice issued by AO u/s 142(1) sent by email AO has not given reasonable time to assessee to reply. The above sequence of events established that assessee was co-operated with the Department and the Assessing Officer during assessment proceedings. We note that there was irregularity in disposing of the objection raised by the assessee against re-opening u/s 147 r.w.s. 148 of the Act which was after four months. Therefore there is irregularity on the part of AO also, which we have observed with the help of sequence of events narrated above, therefore, we note that there is sufficient compliance on the part of assessee to response such notices. Hence, no penalty should be levied on the assessee and therefore we delete the penalty imposed by the AO u/s 271(1)(b) of the Act - Decided in favour of assessee.

Summary

Issues involved:
The judgment involves the confirmation of a penalty levied under section 271(1)(b) of the Income Tax Act, 1961, pertaining to the assessment year 2012-13, by the National Faceless Appeal Centre, Delhi, which arose from a penalty order passed by the National Faceless Assessment Centre, Delhi/Assessing Officer.

Assessee's Compliance with Notices:
During the assessment stage, the Assessing Officer issued various notices to the assessee, including notices under sections 148, 143(2), and 142(1). The assessee responded to the notices in a timely manner, filing the return of income in response to the notice under section 148 and providing necessary documents against the notice under section 142(1). The assessee contended that all notices were attended to, even though there was a delay in responding to the notices sent via email due to the expectation of physical copies. The counsel argued that the delay was reasonable given the circumstances, and no notice remained unattended. The tribunal noted the compliance made by the assessee and the reasons for any delays, ultimately leading to the deletion of the imposed penalty.

Observations and Decision:
The tribunal considered the sequence of events and found that the assessee had cooperated with the department during the assessment proceedings. It was noted that there was a delay in addressing the objections raised by the assessee against the reopening under section 147 r.w.s. 148 of the Act. The tribunal observed that the assessee had made sufficient compliance with the notices, and there were irregularities on the part of the Assessing Officer as well. Due to the established cooperation of the assessee and the irregularities in the proceedings, the tribunal decided to delete the penalty imposed under section 271(1)(b) of the Act. Consequently, the appeal of the assessee was allowed, and the penalty of Rs. 10,000 was revoked.

Conclusion:
The tribunal's decision highlighted the importance of timely compliance with notices and acknowledged the efforts made by the assessee to respond to the Assessing Officer's requirements. By considering the circumstances and irregularities in the proceedings, the tribunal ruled in favor of the assessee, emphasizing the need for procedural fairness and adequate opportunity for taxpayers to address any issues raised during assessments.