2019 (10) TMI 721

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....raised in ITA No. 1231/JP/2018 are as under :- " 1. That the order of the learned AO imposing penalty of Rs. 10,000/- on the assessee for alleged default under section 271(1)(b) of Income Tax Act is bad in law and against facts of the case. The CIT (A) has erred in confirming the order. 2. That the learned AO has erred in holding that the assessee did not comply with the notice issued under section 142(1) dated 9.11.2015. 3. The show cause notice dated 1.7.2016 issued by the learned AO for penalty proceedings under section 271(1)(b) was vague and did not specify the exact default of the assessee. This ground of appeal has not been decided by the CIT (A). 4. That the assessee craves his right to add, alter, amend or delete any ground....

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....unity to meet the charges levied by the AO. Thus he has submitted that the initiation of proceedings under section 271(1)(b) are not legal and liable to be quashed. The second contention of the ld. A/R of the assessee is that the so called notices were not received by the assessee and, in view of the nature of business of the assessee, the majority of the staff remains out of station. A possibility of non receipt of notice is not ruled out. Therefore, he has submitted that even if the notices are served upon the assessee, due to the fact that the assessee's staff remain out of station as per business requirement and subsequent compliance of the assessee would fall in the category of reasonable and bonafide explanation under section 273B of ....

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....nd assessee has not complied with a single notice. Thus in the absence of any reasonable cause for not making the compliance to the notice issued under section 142(1), the penalty under section 271(1)(b) is attracted for each of the defaults. He has relied upon the orders of the authorities below. 5. I have considered the rival submissions as well as the relevant material on record. There is no dispute that the AO has stated in para 1 of the assessment order that the notices under section 142(1) were issued on 5 occasions and the assessee has neither complied with the notices nor attended the corresponding date of hearing. The relevant part of these observations of the AO in the assessment order recording the non compliance of notice is as....

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....n this regard. The penalty under Section 271(1)(b) could not be imposed for each and every notice issued under Section 143(2), which remained not complied with on the part of the assessee. The provision of Section 271(1)(b) is of deterrent nature and not for earning revenue. Any other view taken shall lead to the imposition of penalty for any number of times (without limits) for the same default of not appearing in response to the notice under Section 143(2) of the Act. This does not seem to be the intention of the legislature in enacting the provisions of Section 271(1)(b) of the Act. In case of failure of the assessee to comply with the notice under Section 143(2) of the Act, the remedy with the Assessing Officer lies with framing of "b....