Penalty for non-compliance notices deleted where no reasonable opportunity was given and no lack of reasonable cause was proved.

A penalty for non-compliance with notices in reassessment proceedings cannot be sustained where no effective opportunity is granted and the revenue fails to show that the default was without reasonable cause. The record showed that the assessee had sought deferment of the proceedings, yet the penalty was levied without adequate opportunity. On that basis, the penalty was deleted and the addition to the assessee's liability did not survive.

---

---

Issues: Whether the penalty imposed for non-compliance with notices under the reassessment proceedings was sustainable in the absence of reasonable opportunity and in the absence of proof that the default was without reasonable cause.

Analysis: The assessee was proceeded against for failure to comply with notices issued during assessment proceedings. The record indicated that the assessee had sought deferment of the proceedings and that no effective opportunity was afforded before levy of penalty. The absence of reasonable opportunity, coupled with the failure to establish that the non-appearance was without reasonable cause, rendered the penalty order unsustainable.

Conclusion: The penalty was deleted and the assessee succeeded on this issue.

Final Conclusion: The appeal was allowed and the penalty imposed by the Assessing Officer did not survive.

Ratio Decidendi: A penalty for non-compliance cannot be sustained where reasonable opportunity is not granted and the revenue fails to establish that the default occurred without reasonable cause.

---