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TMI Blog2022 (6) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... e of action for validly initiating penalty proceedings u/s 271(1)(b) for non compliance of notice issued u/s 142(1) during such proceedings , and hence consequently penalty proceedings itself are to be held to be bad in law, liable to be quashed. Thus, we order deletion of penalty levied by the AO u/s 271(1)(b) - Appeal of assessee allowed. - ITA No. 243/VNS/2019 - - - Dated:- 3-6-2022 - Shri Vijay Pal Rao, Judicial Member And Shri Ramit Kochar, Accountant Member For the Assessee : Shri T.P. Shukla, Advocate For the Revenue : Shri A.K. Singh, Sr. DR ORDER PER SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER: This appeal, filed by assessee, being ITA No. 243/VNS/2019, is directed against the appellate order dated 05.09.2019 passed by ld. Commissioner of Income Tax (A), Allahabad (hereinafter called the CIT(A) ) in Appeal No. CIT(A), Allahabad/10111/2018-19 for assessment year (ay) 2010-11, the appellate proceedings had arisen before Learned CIT(A) from penalty order dated 05.06.2018 passed by learned Assessing Officer (hereinafter called the AO ) under Section 271(1)(b) of the Income-tax Act, 1961 (hereinafter called the Act ). We have heard both the parties in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r consideration she has filed his return of income on 28.07.2010 disclosing Income of Rs. 2,45,740/- which fact has been admitted by the learned Assessing Officer In Para-3 of his order. The sources of income were salary from Aditya Birla Public School, Renusagar and bank interest. 2- The appellant resided at Renusagar address till May, 2014 and had a saving bank account number 00000010722349264 with the State Bank of India, Anpara, Sonebhadra and another saving bank account number 07320100003915 In UCO Bank, Renusagar, Sonebhadra jointly with his son Shri Nishit alias Ravi Awasthi Salary and other receipts were deposited by her In the said bank accounts and withdrawals as per need were made from the said accounts from time to time. The appellant's son Nishit alias Ravi is working in Marine Management SCMT of Qatar and NRI and he was also authorized to operate the UCO bank account when he visited India if the need arose. 3. As mentioned by the AO In his order the Ld. Assessing Officer has got Information from AIR that the appellant allegedly deposited sums aggregating to Rs.10,23,026/- In cash in her saving accounts during the F,Y. 2009-10 relevant for A.Y. 2010-11 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment order but no reply was received in his office. The appellant vehemently denies this assertion of ld. AO and very humbly submits that the assessment order and penalty orders have been received by her authorized representative only on 13.08.2018 and not before. The appellant may file a sworn affidavit in this regard if desired. iii. The alleged show cause notice dated 17.05.2018 was never received by the appellant and so none from his side could attend the hearing before the Ld. AO. Since penalty proceedings were carried on one-sided only without considering the facts from the assessee and without allowing opportunity of being heard, the whole proceedings are vitiated and are in violation of Section 274(1) of the Act which is an overriding provisions. Accordingly the order u/s 271(1)(b) dated 05.06.2018 imposing penalty of Rs. 10,000/- on appellant is liable to be set aside. iv. In addition to above, non-service of notice is a reasonable cause for non-compliance of the appellant assessee. As per legal definitions as given in Advanced Law Lexicon by P. Ramanatha Aiyar, 2005 edition a reasonable cause means a cause that would constrain a person of average intelligence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilable in AIR with the department that cash aggregating to Rs. 10,23,026/- were deposited by the assessee in her saving bank account during the year under consideration and the assessee did not file her return of income for impugned assessment , the assessment in the case of the assessee was reopened by invoking provisions of Section 147/148 of the 1961 Act. The AO issued notice u/s 148 dated 31.03.2017during reassessment proceedings , which was not served on the assessee, as the assessee was not residing at Renusagar, because the assessee left Renusagar in 2014 and shifted to Jaipur. It was submitted that none of the notices issued by AO during re-assessment proceedings as well during penalty proceedings were served on the assessee. The AO finally passed reassessment order ex-parte on 27.12.2017 , u/s 144/147 of the 1961 Act. It was submitted that even penalty order dated 05.06.2018 u/s 271(1)(b) was passed by AO, ex-parte. It was further submitted that re-assessment as framed by the AO itself was quashed by Ld. CIT(A) , NFAC, New Delhi vide appellate order dated 17.12.2021 vide DIN and Order No. ITBA/NFAC/S/250/2021-22/1037893041(1) (National Faceless Appeal Centre, New Delhi) . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee has also contended that she was also not served with reassessment order and the penalty order passed by the AO , as she shifted to Jaipur from Renusagar, in 2014. The assessee has claimed that she was teacher in Renusagar, and got divorced, and hence shifted to Jaipur , in 2014, and hence no notice as well reassessment order/penalty order , which were all post 2014, could have been served to her at her disclosed address at Renusagar.It is not brought on record by the assessee as to whether she supplied the information about the new address at Jaipur to the AO or even applied for correction in PAN database. The assessee is equally responsible for its woes. However, while adjudicating appeal against quantum re-assessment , the ld. CIT(A), NFAC, New Delhi , vide appellate order dated 17.12.2021 , has quashed the quantum re-assessment , by holding as under: 1. In the light of the observations made in para-5 above, in all its subparagraphs, and respectfully following the ratio of the judicial pronouncements referred to therein , it is concluded that in the present case, firstly the AO recorded wrong an incorrect reasons for reopening the assessment and secondly, the ex- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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