2025 (9) TMI 230 - AT - Income Tax

Penalty under s.142(1) deleted where AO denied reasonable opportunity and failed to prove assessee's absence without cause

ITAT held that penalty imposed under s.142(1) for non-compliance must be deleted where AO failed to afford a reasonable opportunity and did not establish ... Penalty imposed for non compliance of notices u/s 142(1) - HELD THAT:- In absence of any representation from assessee’s side, learned Departmental Representative for Revenue was heard and materials on record were perused. In this case the AO issued notices u/s 142(1) of the Act to the assessee to furnish requisite details. The assessee, requested for keeping the proceedings in abeyance. As submitted that the appeal filed before the CIT(A) is still pending for disposal and requested the AO to keep the penalty proceedings in abeyance till the disposal of appeal by learned CIT(A). AO rejected the plea of the assessee and imposed penalty. On perusal of records, it is found that the AO did not provide reasonable opportunity to the assessee. AO has failed to establish that the failure of the assessee to appear for hearing during assessment proceedings was without reasonable cause. AO has passed a hasty order without providing reasonable opportunity to the assessee and without making good case for levy of penalty. AO is directed to delete the penalty. Appeal of the assessee stands allowed. The assessee did not file a return for AY 2019-20. Notices u/s 148 and u/s 142(1) were issued; non-compliance led the Assessing Officer to complete assessment u/s 144 read with section 147/144B, determining total income at Rs. 11,34,000 by making an addition of Rs. 11,34,000 u/s 69A as 'unexplained income' and levying a penalty of Rs. 30,000 for non-compliance with notices u/s 142(1). The appeal against penalty to the first appellate authority was dismissed. On Tribunal hearing, there was no representation for the assessee; the Departmental Representative was heard and records perused. Tribunal found that the Assessing Officer 'did not provide reasonable opportunity to the assessee' and 'failed to establish that the failure of the assessee to appear for hearing during assessment proceedings was without reasonable cause.' The AO had 'passed a hasty order' and did not make a 'good case for levy of penalty.' The penalty was deleted and the appeal allowed.