Penalty for Non Compliance with Statutory Notices upheld where no bona fide, substantiated explanation was offered by the assessee.

Examines imposition of monetary penalty for each failure to comply with statutory notices where the assessee did not file return, ignored notices issued under the assessment process and failed to provide a bona fide, substantiated explanation. The legal principle applied is that penalty may be levied for each separate non compliance when the assessee either offers no explanation or an unsubstantiated/false explanation and does not discharge the onus of proving reasonable cause and full disclosure; on the facts the penalty was sustained and the appeal dismissed in favour of revenue.

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Issues: Whether the lower authorities were justified in levying penalty for non-compliance of statutory notices, imposing a penalty for each failure to comply with notices issued under section 142(1) of the Income-tax Act, 1961.

Analysis: The Tribunal examined the facts that the assessee did not file the return for the year, the assessment was reopened and notices under section 142(1) were issued which the assessee failed to comply with. The assessing officer proceeded to pass an ex-parte best judgment assessment and initiated penalty proceedings. The statutory provision permits imposition of a monetary penalty for each failure to comply with notices where the assessee either fails to offer an explanation or offers an explanation which is found false or is not substantiated and the assessee fails to prove that the explanation is bona fide and that all material facts have been disclosed. The assessee did not appear before the Tribunal, made no submissions to rebut the assessing officer's satisfaction, and did not demonstrate a bona fide, substantiated reason for non-compliance beyond pleading ignorance. The Tribunal therefore confined its decision to whether the conditions for levy of penalty were satisfied on record and found that the onus to show reasonable cause rested on the assessee and was not discharged.

Conclusion: The penalty levied for each failure to comply with statutory notices is upheld and the appeal is dismissed; decision is in favour of the revenue.

Ratio Decidendi: Where an assessee fails to comply with statutory notices and does not furnish a bona fide, substantiated explanation establishing reasonable cause and disclosure of material facts, a monetary penalty for each such failure may be validly imposed.

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