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The Income Tax Appellate Tribunal (ITAT) held that every non-compliance with a notice u/s 142(1) gives a separate cause of action for levying penalty u/s 271(1)(b). There must be a specific initiation and issuance of notice u/s 271(1)(b) for each non-compliance, and the assessee must be put on notice. Initiating penalty proceedings and levying penalty u/s 271(1)(b) for non-compliance with a notice u/s 142(1) is incorrect. The Assessing Officer (AO) issued only one notice u/s 271(1)(b), which the assessee claimed was never received, and the AO imposed an ex-parte penalty u/s 271(1)(b), breaching principles of natural justice. The Commissioner of Income Tax (Appeals) [CIT(A)] did not verify the assessee's contentions and explanations regarding non-compliance with notices u/s 271(1)(b) and dismissed the appeal without calling for records or specifying the non-compliance upheld. The ITAT accepted the assessee's contentions and deleted the penalty, considering the reasonable explanation for not attending the AO's hearing and the provisions of Sections 273B and 271(1)(b).
The Income Tax Appellate Tribunal (ITAT) held that every non-compliance with a notice u/s 142(1) gives a separate cause of action for levying penalty u/s 271(1)(b). There must be a specific initiation and issuance of notice u/s 271(1)(b) for each non-compliance, and the assessee must be put on notice. Initiating penalty proceedings and levying penalty u/s 271(1)(b) for non-compliance with a notice u/s 142(1) is incorrect. The Assessing Officer (AO) issued only one notice u/s 271(1)(b), which the assessee claimed was never received, and the AO imposed an ex-parte penalty u/s 271(1)(b), breaching principles of natural justice. The Commissioner of Income Tax (Appeals) [CIT(A)] did not verify the assessee's contentions and explanations regarding non-compliance with notices u/s 271(1)(b) and dismissed the appeal without calling for records or specifying the non-compliance upheld. The ITAT accepted the assessee's contentions and deleted the penalty, considering the reasonable explanation for not attending the AO's hearing and the provisions of Sections 273B and 271(1)(b).
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