Assessee wins appeal, penalty canceled for non-compliance with tax notices.

The Tribunal ruled in favor of the assessee, setting aside the penalty imposed under section 271(1)(b) of the Act for failure to comply with notices under sections 142(1)/143(2) of the Act. The Tribunal found that the assessee had a reasonable cause for non-compliance, as the change of address was duly reported to the Revenue Department, and no attempts were made to serve notices at the new address. Therefore, the penalty was canceled, and the appeal of the assessee was allowed.

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Issues:
Levy of penalty u/s 271(1)(b) of the Act for failure to comply with notices u/s 142(1)/143(2) of the Act.

Analysis:

Issue 1: Compliance with Notices
The AO noted that the assessee company failed to furnish details/information/explanation in response to multiple notices, leading to the levy of penalty u/s 271(1)(b) of the Act. The assessee argued that a change in address was reported for the subsequent assessment year, and no notice was served at the new address. However, the CIT(A) dismissed the appeal, stating that the record showed the assessee had multiple addresses and that the change of address should have been communicated to the AO. The assessee contended that the penalty order mentioned the old address despite the new address being reported in the income tax return for the subsequent year. The Tribunal found that the assessee had indeed reported the new address to the Revenue Department before the assessment was completed, and no attempts were made to serve notices at the new address. The Tribunal concluded that there was no default on the part of the assessee to comply with the notices u/s 142(1)/143(2) of the Act.

Issue 2: Specificity of Charges
The AO issued notices to the assessee at the old address without mentioning the specific default for which the penalty was levied. The Tribunal noted that the penalty order did not specify the default for which the penalty was imposed, making it difficult to determine the alleged non-compliance by the assessee. The Tribunal highlighted that the quantum matter was still pending before the CIT(A) as per the Tribunal's directions, further emphasizing the lack of specific charges against the assessee in the penalty order.

Decision and Conclusion
Considering the facts and circumstances, the Tribunal found that the assessee had a reasonable cause for the failure to comply with the notices. Therefore, the Tribunal set aside the orders of the authorities below and canceled the penalty, ruling in favor of the assessee. The appeal of the assessee was allowed, and the penalty was deemed not leviable in the matter.

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