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TMI Blog2016 (2) TMI 1086X X X X Extracts X X X X X X X X Extracts X X X X ..... ead with Section 143(3) of the Act and it was completed on 13.8.2012. As find that during the assessment proceedings, the penalty cannot be imposed for each default, but the penalty can be imposed only for the first default. Therefore, in these cases if the assessee failed to comply with the notices, the remedy with the AO was to frame “best judgement assessment” u/s 144 and not to impose penalty u/s 271(1)(b) again and again. Therefore, we modify the order of AO and CIT(A) and restrict the penalty for the first default of the assessee in not complying with the notice u/s 143(2). - Decided partly in favour of assessee. - I.T.A. Nos. 650 to 656/Ind/2015 - - - Dated:- 8-2-2016 - Shri D. T. Garasia, Judicial Member Appellants by : Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee was provided another opportunity to furnish explanation/justification as to why penalty proceedings should not be levied. In response, the assessee filed a letter on 02.11.2012 again requesting to keep the penalty proceedings in abeyance till the decision of the CIT(A) but had not furnished any reply on merits. The AO observed that the assessee had not taken the ground regarding penalty proceedings u/s 271(1)(b) of the Act before the Appellate Authority and, therefore, it was not rational to keep the penalty proceedings in abeyance. Therefore, the AO concluded that the assessee failed to comply with the statutory notices issued without any reasonable cause and was liable for penalty u/s 271(1)(b) of the Act. The AO levied penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty cannot be levied. Lastly, the ld. Authorized Representative conceded that as per the decision of Delhi Tribunal in the case of Rekha Rani vs. Dy. CIT, (2015) 154 ITD 0617, wherein it is held by the Tribunal that if the assessee did not remain present for the notices issued, then penalty cannot be imposed for each default and the penalty imposed was only restricted to first notice and not each and every notice issued by the assessee. The ld. Authorized Representative conceded before me that as per the decision if the penalty is imposed only to the first notice, then he had no objection as per the decision of Delhi Tribunal. 5. The Ld. DR objected to it and Ld. DR submitted that as per this decision of Delhi Tribunal, the notice was i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture in enacting the provisions of Section 271(1)(b) of the Act. In case of failure of the assessee to comply with the notice u/s 143(2) of the Act, the remedy with the AO lies with framing of best judgement assessment under the provisions of Section 144 of the Act and not to impose penalty u/s 271(1)(b) of the Act again and again. In this view of the matter, I.T.A.T. restricted the penalty levied u/s 271(1)(b) of the Act to the first default of the assessee in not complying with the notice u/s 143(2) of the Act. Accordingly, the penalty imposed is restricted to ₹ 10,000/- as against ₹ 50,000/- confirmed by the ld. CIT(A). The grounds of appeal of the assessee are thus partly allowed. 7. I respectfully following the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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