2020 (7) TMI 684 - AT - Income Tax

Tribunal Condoned Delay in Penalty Appeal, Ruling in Favor of Assessee

The Tribunal condoned the delay in filing the appeal against the penalty imposed under section 271(1)(b) for A.Y. 2010-11, considering the assessee's ... Levy of penalty u/s 271(1)(b) - non-compliance to the notice issued u/s 142(1) - HELD THAT:- Assessee had already left the country way back in year 2010 and when the notice was issued in July 2017, there was no one available to receive the notice at the last known address, the very service of the notice issued u/s 142(1) is in doubt. CIT(A) has also recorded a similar finding and the AO in his remand report dated 14.06.2019 has also taken note of the fact that the assessee was out of India since 2010 as evidenced by the assessee’s passport. In such peculiar facts and circumstances where the assessee was out of the country and he had no knowledge of the subject notice and there is nothing on record that the notice was duly served on the assessee, we find that the assessee’s explanation that he could not have complied with the notice is found to be reasonable and the penalty so levied u/s 271(1)(b) - Appeal of the assessee is allowed. Issues:Delay in filing the appeal and condonation of delay.Levy of penalty u/s 271(1)(b) for A.Y. 2010-11.Non-compliance with notice u/s 142(1) and subsequent penalty imposition.Delay in filing the appeal and condonation of delay:The appeal was filed against the order confirming the penalty u/s 271(1)(b) for A.Y. 2010-11. The assessee, currently a resident of Germany, cited being out of India as the reason for the delay in filing the appeal. The assessee submitted an affidavit requesting condonation of delay, stating no mala fide intent. The Tribunal, after considering the reasons provided, condoned the delay and admitted the appeal for adjudication on merits.Levy of penalty u/s 271(1)(b) for A.Y. 2010-11:The penalty u/s 271(1)(b) was imposed without providing the assessee an opportunity to be heard, as the notice and penalty order were issued on the same day. The penalty proceedings were initiated due to non-compliance with a notice u/s 142(1). The CIT(A) confirmed the penalty, stating non-compliance with a different notice date. The assessee argued non-receipt of notices due to being out of India since 2010. The Tribunal noted the CIT(A)'s acknowledgment of non-compliance due to the assessee's absence and directed the penalty to be deleted based on the reasonable cause for non-compliance.Non-compliance with notice u/s 142(1) and subsequent penalty imposition:The assessee, having left India in 2010, was not present to receive notices sent by the Department. The notice u/s 142(1) was not served due to the absence of anyone at the given address. The Tribunal found the service of notice to be in doubt, considering the assessee's prolonged absence and lack of evidence of notice delivery. The Tribunal, supported by the CIT(A) and the Assessing Officer, concluded that the penalty imposed for non-compliance was unreasonable and directed its deletion. The appeal of the assessee was allowed, and the penalty u/s 271(1)(b) was deleted.In conclusion, the Tribunal, after condoning the delay in filing the appeal, found the penalty imposed for non-compliance with the notice u/s 142(1) to be unjustified due to the assessee's extended absence from India and lack of evidence of notice delivery. The Tribunal allowed the appeal and directed the deletion of the penalty.