Assessment against struck-off company: penalty for alleged non-compliance set aside after return and compliance were filed despite notices to a non-existent entity

Assessment notices were issued and a penalty imposed for alleged non-compliance despite the taxpayer notifying the revenue that the company name had been struck off the register and subsequently filing a return and complying with notices. The tribunal found the issuing authority had sent further procedural notices to a non-existent entity and that there was no ex parte assessment; accordingly the penalty for non-compliance was unwarranted and was set aside, relieving the taxpayer of penalty liability.

---

---

Issues: Whether penalty under section 271(1)(b) of the Income-tax Act, 1961 can be sustained for alleged non-compliance with statutory notices where the company had been struck off the register and the assessee had made online submissions and returned income in response to notices.

Analysis: The proceedings involved levy of penalty under section 271(1)(b) for failure to comply with notices issued in the course of assessment proceedings initiated by notice under section 148. The facts include an earlier communication that the company's name was struck off from the register (notice under section 560(3) / company struck off) and evidence of online replies and filing of return in response to notices, including acknowledgements of submissions in December 2019 and filing of return on 27.11.2019. The Assessing Officer had made addition in assessment but penalty proceedings recorded non-compliance with notices (including a notice under section 142(1)). The Tribunal examined whether there was a reasonable cause for non-compliance given the company's struck off status and the documented online replies and filings, and whether notices were validly addressed to a non-existent entity.

Conclusion: Penalty under section 271(1)(b) is deleted; appeal is allowed in favour of the assessee.

---