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TMI Blog2023 (8) TMI 430X X X X Extracts X X X X X X X X Extracts X X X X ..... Smt. Monisha Choudhary (Addl. CIT) ORDER PER: SANDEEP GOSAIN, J.M. This appeal by the assessee is directed against the order dated 06.12.2022 of ld. CIT (A), National Faceless Appeal Centre (NFAC), Delhi passed under section 250 of the IT Act, 1961 for the assessment year 2011-12. The assessee has raised the following grounds :- 1. Under the facts and circumstances of the case, the ld. CIT (A) erred in confirming the action of Assessing Officer of passing order u/s 271(1)(b) without serving the notice and providing opportunity to the assessee. 2. Under the facts and circumstances of the case, the ld. CIT (A) erred in confirming the action of Assessing Officer in imposing penalty of Rs. 40,000/-. 3. The appellant prays to leave to add, alter or amend foresaid grounds of appeals at or before the time of hearing of appeal. 2. The appeal filed by the assessee is delayed by 13 days. The assessee has explained the delay by filing an application dated 17th February, 2023 for condonation of delay along with supporting affidavit of the assessee and requested for condonation of delay. The contents of the application for seeking condonation of delay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to tax and therefore she is not required to file return as per the Income tax law. The AO received information from departmental software that assessee made time deposit of Rs. 20,00,000/- in the Punjab National Bank during the financial year 2010-11. Since, the assessee had not filed her return of income for A.Y. 2011-12, the AO presumed that investment was made out of income from undisclosed source which escaped assessment. The AO issued a notice u/s 148 asking the assessee to file return, however such notice was never served to the assessee. Thereafter, the AO completed the assessment under section 144 as a best judgment assessment treating Rs. 20,00,000/- as Income from undisclosed sources and issued Penalty notices u/s 271(1)(b) alleging that there is no compliance on part of assessee in response to notices issued by him. Being aggrieved by the order of the AO, the assessee preferred appeal before the ld. CIT (A). The Ld. CIT (A) did not accept the contention of assessee holding that, penalty has been levied u/s 271(1)(b) of the Income Tax Act. The CIT(A) without considering the reply of the assessee, dismissed the appeal of the assessee. Now the assessee is in appeal before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned in order Never Served to assessee The AO has not mentioned in the order about the efforts of serving the notice that: o Whether the assessee refused to accept the notice. o Whether the assessee was not found at the place. o Whether the assessee was not residing at that place. All these facts indicate that the service of notice only a formality and no true or genuine efforts were made to serve the notice. In reality no notice was ever served upon the assessee by post or affixture. What is a proper service of notice under the provisions of the Income-tax Act, 1961 (the Act). This issue is vital because an improper service may vitiate an entire assessment. The issue of service of notice generally is covered by section 282 of the Act. This says that a notice or requisition under the Act may be served on the person therein named either by post or as if it were a summons issued by a Court under the Code of Civil Procedure, 1908 (the CPC). In CIT vs. Ramendra Nath Ghosh, 82 ITR 888(SC), the hon ble court has discussed the Rule 17 of Order V of CPC which read as under: Where the defendant or his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 271(1)(b) for non-compliance of the notices dt. 16/08/2018, 08/10/2018, 01/11/2018 and 22/11/2018. No penalty can be imposed for this notice as: The notice has never been served on the assessee. Jurisdictional ITAT Jaipur Bench in case of Shri Chouth Mal Sahram Vs ITO Ward 7(4) Jaipur ITA No. 311/JP/2018 order dt. 05/07/2018 held that As regards the penalty levied for non compliance of notice under section 142(1), we find that the assessee was not served with any of the notices issued by the AO due to the change of address and since the assessee has not filed any return of income, therefore, the AO was not having the present address of the assessee. Hence when the notice issued under section 142(1) was not served upon the assessee, and the AO has not conducted further enquiry regarding the current address of the assessee then in the facts and circumstances of the case that the assessee had already furnished the current address in the quantum proceedings, we find that the reasons explained by the assessee are bonafide and reasonable. Since, no notice is received by the assessee it cannot be held non-compliance by the assessee. In view of the above, the penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endorsed thereon or annexed thereto stating that he has so affixed the copy, the circumstances under which he did so, and the name and address of the person (if any) by whom the house was identified and in whose presence the copy was affixed The ld. A/R also relied on the decision of the Jaipur Bench of the Tribunal in the case of Shri Chouth Mal Sahram vs. ITO in ITA No. 311/JP/2018 dated 05.07.2018 wherein the coordinate bench of the Tribunal has held as under :- As regards the penalty levied for non compliance of notice under section 142(1), we find that the assessee was not served with any of the notices issued by the AO due to the change of address and since the assessee has not filed any return of income, therefore, the AO was not having the present address of the assessee. Hence when the notice issued under section 142(1) was not served upon the assessee, and the AO has not conducted further enquiry regarding the current address of the assessee then in the facts and circumstances of the case that the assessee had already furnished the current address in the quantum proceedings, we find that the reasons explained by the assessee are bonafide and reasonable. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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