Penalty for non-compliance with tax notice set aside due to address change issue

The Tribunal set aside the penalty imposed under section 271(1)(b) for non-compliance with a notice under section 142(1) of the Income Tax Act, 1961 for assessment year 2014-15. The Tribunal accepted the assessee's explanation of address changes affecting timely receipt of notices, supported by documentary evidence. As the specific notice was not received due to the address change, the penalty for non-compliance with that notice was deleted. The Tribunal deemed the reasons for non-compliance genuine and allowed the assessee's appeal.

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Issues:
Penalty under section 271(1)(b) of the Income Tax Act, 1961 for assessment year 2014-15.

Analysis:
1. The appeal was against the penalty order passed under section 271(1)(b) of the Income Tax Act, 1961 for the assessment year 2014-15. The assessee raised grounds challenging the penalty imposed by the Assessing Officer, seeking its deletion.

2. The case involved the non-compliance of notices issued to the assessee under various sections of the Act. The Assessing Officer initiated penalty proceedings under section 271(1)(c) for furnishing inaccurate particulars of income and concealing income, leading to the issuance of penalty notice under section 271(1)(b) read with section 274.

3. The CIT(A) upheld the penalty order, noting that the assessee did not dispute the facts mentioned in the penalty order and failed to provide any valid reasons for non-compliance with the notice issued under section 142 of the Act.

4. In the appeal before the Tribunal, the assessee contended that due to address changes, notices were not received promptly, affecting compliance. The Tribunal considered documentary evidence, including Aadhar Card and an affidavit, to establish the change of address and the reasonable cause for non-compliance.

5. The Tribunal observed that the penalty under section 271(1)(b) could only be imposed for non-compliance with specific notices mentioned in the Act. Since the assessee was not served with the notice under section 142(1) due to address change, the penalty for non-compliance of that notice was deleted.

6. The Tribunal found that the assessee had provided a current address in a letter, and the reasons for non-compliance were genuine. Therefore, the penalty imposed under section 271(1)(b) for non-compliance with section 142(1) was set aside, and the appeal of the assessee was allowed.

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