AI Insights
The case involves Mohammed Hanif Nannamiya Kazi, a wholesale dealer of vegetables, who appealed against the assessment order and penalty imposed by the Income Tax Officer (ITO), Ward-3(3)(1), Ahmedabad, for the Assessment Year 2017-18. The ITO had added Rs. 1,74,31,100 as unexplained cash deposits in the assessee's bank account during the demonetization period, treating them as unexplained income under sections 68 and 69A of the Income Tax Act. The assessee contended that these deposits were from his business transactions and not unexplained income. The Tribunal found that the ITO had exceeded his jurisdiction by treating the entire amount as unexplained and only a portion related to the demonetization period should be considered for addition to the income. The Tribunal also addressed the penalties levied for non-compliance with notices, confirming a reduced penalty.
Appeal Details
Counselvise Citation
[2023] 140 COUNSELVISE.COM (IT) 134531 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
6 month(s) 4 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
06-07-2023
Appeal Filed By
Assessee
Order Result
PartlyAllowed
Bench Allotted
C
Next Hearing Date
27-06-2023
Assessment Year
2017-2018
Appeal Filed On
01-01-2023
Judgement Text
आयकर अपीलीय अिधकरण, अहमदाबाद ᭠यायपीठ IN THE INCOME TAX APPELLATE TRIBUNAL, ‘’ C’’ BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER And SHRI TR SENTHIL KUMAR, JUDICIAL MEMBER आयकर अपील सं./ITA Nos. 02 & 03/AHD/2023 िनधाᭅरण वषᭅ/Asstt. Years: 2017-2018 Mohhamed Hanif Nannamiya Kazi, B-49, Noore Burhan Society, Sarkhej Road, Juhapura, Ahmedabad-380055. PAN: AMNPK9747K Vs. I.T.O, Ward-3(3)(1), Ahmedabad. (Applicant) (Respondent) Assessee by : Shri P.F Jain, A.R Revenue by : Shri Atul Pandey, Sr.D.R सुनवाई कᳱ तारीख/Date of Hearing : 28/06/2023 घोषणा कᳱ तारीख /Date of Pronouncement: 07/07/2023 आदेश/O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: The captioned two appeals have been filed at the instance of the Assessee against the order of the Learned Commissioner of Income Tax (Appeals)., Ahmedabad arising in the matter of assessment order passed under s. 143(3) r.w.s. 147 of the Act and ITA No. 3/AHD/2023 is arising from the penalty order passed under section 272A(1)(d) of the Income Tax Act, 1961 (here-in-after referred to as "the Act") relevant to the Assessment Year 2017-18. ITA nos.02 & 03/AHD/2023 A.Y. 2017-18 2 2. The assessee has raised the following concise grounds of appeal: (1) The Ld. CIT(A) has grievously erred in law and on facts in upholding high pitched order of A.O. passed on 10/12/2019 u/s. 144 making un-warranted addition of Rs.1,74,31,100/- as unexplained cash in the bank account u/s. 68/69A of the Act without properly appreciating the facts of the assessee in as much as that the assessee having business income as whole sale dealer for sale of vegetables of farmers as commission agent, provision of section 68/69A has been wrongly applied. (2) The Ld. CIT(A). has grievously erred in law and on facts in not properly considering and appreciating the written submission dated 14/09/2022 submitted to him explaining the deposit made in the bank and thereby wrongly confirming the addition of Rs.1,74,31,100 made by A.O. (3) The learned CIT(appeals) has erred in law and on facts in confirming the addition without considering and appreciating the facts that return was selected for limited scrutiny for verifying cash deposit during demonetization period and the A.O. exceeded his jurisdiction of the said scrutiny rendering the assessment as erroneous. (4) He has also erred in law and on facts in upholding the cash deposit in the bank account u/s. 68/69A of the Act without appreciating the facts that the assessee as a wholesale dealer of vegetables of farmers involving cash sales and the deposits thereof in the banks cannot be treated as income. (5) He has also erred in law and on facts in upholding the provision of section 115BBE of the Act in as much as the assessee was having business income which cannot be held to be taxed u/s. 115BBE. (6) On the facts of the assessee, no addition u/s. 68/69A ought to have been made and return of Rs.3,14,870 ought to have been accepted. (7) On the facts of the assessee, no interest u/s.234A of Rs.4,04,265/- and 2348B of of the Act aggregating to Rs.48,51,180/- ought to have been levied. (8) The appellant craves leave to add to alter and/or to modify any of the grounds of appeal. 3. The only issue raised by the assessee is that the Ld. CIT(A) erred in confirming the addition made by the AO for Rs. 1,74,31,100/- under the provisions of section 69A/68 of the Act. 4. The facts in brief are that the assessee in the present case is an individual and claimed to be engaged in the trading business of vegetable in APMC market under license J-91 from “Khetivadi Utpann Bajar Samiti Ahmedabad”. There were cash deposits in his bank account maintained with SBI amounting to Rs. ITA nos.02 & 03/AHD/2023 A.Y. 2017-18 3 1,74,31,100/- in the year under consideration. The details of the same stand as under: Sr.No. Name of Bank & Branch A/C No. Cash Deposited during demonetization period Cash deposited during F.Y. 2016- 17 1. State Bank of India, Jamalpur Branch, Ahmedabad 30019423332 16,56,500/- 1,57,69,600/- 2. State Bank of India, APMC Vasna Branch, Ahmedabad 10397117296 - 5,000/- Total Cash Deposited During the year of Rs. 1,74,31,100/- 4.1 On question by the AO about the source of cash deposit, the assessee failed to make any reply. Therefore, the AO made the addition of Rs. 1,74,31,100/- to the total income of the assessee by observing as under: 5. In view of the above discussion and in the absence of any compliance from the assessee, the amount of Rs. 1,74,31,100/- [including cash deposited during demonetization period of Rs. 16,56,500/-] are hereby treated as unexplained and is proposed to be added to the income of the assessee u/s.69A of the Income Tax Act. Penalty u/s 271AAC of the Act is also proposed to be initiated on the addition of Rs. 1,74,31,100 /- 6. prejudice to the above, if the assessee takes a plea in future before any appellate authority that the credits in the bank accounts were recorded in the books of accounts (however, the assessee has not produced any books of accounts or any details during the course of assessment proceedings), the addition of Rs. 1,74,31,100/- shall be treated as unexplained cash credits u/s 68 of the IT Act as the assessee has not submitted any explanation regarding the source of these credits in bank account. Hence, the addition shall be considered u/s 68 of the IT Act on alternate basis. Accordingly, penalty proceedings under section 271AAC of the IT Act shall stand initiated separately for addition u/s.68 of the IT Act. Accordingly, now this amount of Rs. 1,74,31,100/- is hereby added u/s.69A of the IT Act and is to be taxed u/s. 115BBE of the Income Tax Act. 5. Aggrieved assessee preferred an appeal to the Ld.CIT(A). 6. The assessee before the Ld. CIT(A) submitted that there was cash deposits and corresponding cash withdrawal which was utilized for future deposit in the bank account of the assessee. However, the AO without considering the ITA nos.02 & 03/AHD/2023 A.Y. 2017-18 4 withdrawal from the bank account has treated the entire amount of deposit in the bank as income of the assessee. 6.1 It was also submitted that the assessee, being a vegetable vendor, was dealing only in the cash transaction. As per the assessee, whatever amount of cash was deposited and withdrawn from the bank account was representing sale and purchase of vegetables. Therefore, the entire amount cannot be treated as total income of the assessee. According to the assessee, he has only earned commission income from the sale/purchase of vegetables. In the year under consideration, he has shown income from the trading of vegetables (net income of Rs. 2,50,100/-) in the individual capacity of Rs. 7,58,860/- as commission. The assessee also submitted that he has been showing income by way of commission from vegetable trading since Assessment Year 2014-15. 6.2 Without prejudice to the above the assessee further contended that the case of the assessee was selected to verify the cash deposited during the demonetization period, but the AO has exceeded his jurisdiction by taking cash deposit of the entire year as income of the assessee. As per the assessee the cash deposited during the demonetization period stands at Rs. 16,56,500/- representing business receipt and therefore only percentage of profit on such cash deposit can be added to the total income of the assessee. However, the Ld.CIT(A), disregarded the contention of the assessee and confirmed the order of the AO by observing as under: 6.3 I have gone through the submissions, bank statements filed by the appellant. No effort has been made to support the withdrawal and deposit during this period. No bills and vouchers and no supporting documents have been provided. I do not know whether the appellant is maintaining the books of accounts because no effort has been made to co- relate any entry appearing in the bank statement. 6.4 Hence, the entire deposit of Rs.1,74,31,100/- remains unexplained. Hence, the Assessing Officer is justified in making addition u/s.68 of the Income Tax Act. ITA nos.02 & 03/AHD/2023 A.Y. 2017-18 5 7. Being aggrieved by the order of the learned CIT-A, the assessee is in appeal before us. 8. The learned AR before us filed paper books running from pages 1 to 57 and reiterated the contentions made before the Ld. CIT(A). 9. On the other hand, the Ld. DR vehemently supported the order of the authorities below. 10. We have heard the rival contentions of both the parties and perused the materials available on record. Admittedly, it is a case of limited scrutiny as evident from the notice issued u/s 143(2) of the Act, dated 21/09/2018. A copy of the notice is placed on page 1 of the paper book. The notice issued u/s 132 of the Act states that case has been selected under limited scrutiny to verify the cash deposit during the demonetization period. Thus, to our understanding, the scope was limited to the extent of cash deposited during the demonetization period. 10.1 However, we find that the AO under the assessment order has treated the cash deposits made by the assessee during the entire year as unexplained money/ cash credit under section 69A/68 of the Act. The action of the AO is clearly in violation of the instruction issued by the CBDT Circular No. 5 dated 17/07/2016. The relevant extract reads as under. 2. In order to ensure that maximum objectivity is maintained in converting a case falling under "Limited Scrutiny' into a 'Complete Scrutiny case, the matter has been further examined and in partial modification to Para 3(d) of the earlier order dated 29.12.2015, Board hereby lays down that while proposing to take up 'Complete Scrutiny' in a case which was originally earmarked for 'Limited Scrutiny, the Assessing Officer (AO) shall be required to form a reasonable view that there is possibility of under assessment of income if the case is not examined under 'Complete Scrutiny. In this regard, the monetary limits and requirement of administrative approval from Pr. CIT/CIT/Pr. DIT/DIT, as prescribed in Para 3(d) of earlier Instruction dated 29.12.2015, shall continue to remain applicable. 3. Further, while forming the reasonable view, the Assessing Officer would ensure that: a. there exists credible material or information available on record for forming such view; ITA nos.02 & 03/AHD/2023 A.Y. 2017-18 6 b. this reasonable view should not be based on mere suspicion, conjecture or unreliable source; and c. there must be a direct nexus between the available material and formation of such view. 4. It is further clarified that in cases under "Limited Scrutiny', the scrutiny assessment proceedings would initially be confined only to issues under 'Limited Scrutiny and questionnaires, enquiry, investigation etc. would be restricted to such issues. Only upon conversion of case to 'Complete Scrutiny' after following the procedure outlined above, the AO may examine the additional issues besides the issue(s) involved in 'Limited Scrutiny. The AO shall also expeditiously intimate the taxpayer concerned regarding conducting 'Complete Scrutiny in such cases. 10.2 We also note that the ITAT in identical facts and circumstances in ITA No. 981/AHD/2019 in the case of Shri Narendrakumar Rameshbhai Patel has decided the issue vide order dated 28/03/2020 by observing as under: 12. We have heard the rival contentions of both the parties and perused the relevant materials available on record before us. Admittedly, the case of the assessee was selected under “Limited Scrutiny” scheme as evident from the notice u/s 143(2) of the Act, placed on page 1 of the paper book-I. As per the CBDT instruction No.20/2015 dated 29/12/2015 and instruction no 05/2016 dated 14-07-2016 the Assessing Officer in case of “Limited Scrutiny” can only examine those issues for which the case has been selected or the issue mentioned therein. If the AO of the view that there is a potential escapement of income, he may convert the “Limited Scrutiny” into “Complete Scrutiny” but such view should be reasonable view based on credible information or material available on record. Furthermore, there should be direct nexus between such view and information/material. The relevant portion of the instruction stands as under: “3. As far as the returns selected for scrutiny through CASS-2015 are concerned, two type of cases have been selected for scrutiny in the current Financial Year-one is 'Limited Scrutiny' and other is 'Complete Scrutiny'. The assessees concerned have duly been intimated about their cases falling either in 'Limited scrutiny' or 'Complete Scrutiny' through notices issued under section 143(2) of the Income-tax Act, 1961 (‘Act’). The procedure for handling 'Limited Scrutiny' cases shall be as under: a. In 'Limited Scrutiny' cases, the reasons/issues shall be forthwith communicated to the assessee concerned. b. The Questionnaire under section 142(1) of the Act in ‘Limited Scrutiny' cases shall remain confined only to the specific reasons/issues for which case has been picked up for scrutiny. Further, the scope of enquiry shall be restricted to the 'Limited Scrutiny' issues? " c. These cases shall be completed expeditiously in a limited number of hearings. d. During the course of assessment proceedings in 'limited Scrutiny' cases, if it comes to the notice of the Assessing Officer that there is potential escapement of income exceeding Rs. five lakhs (for metro charges, the monetary limit shall be Rs. ten lakhs) requiring substantial verification on any other issue(s), then, the case may ITA nos.02 & 03/AHD/2023 A.Y. 2017-18 7 be taken up for 'Complete Scrutiny' with the approval of the Pr.CIT/CIT concerned. However, such an approval shall be accorded by the Pr.CIT/CIT in writing after being satisfied about merits of the issue(s) necessitating 'Complete Scrutiny' in that particular case. Such cases shall be monitored by the Range Head concerned. XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX “2. In order to ensure that maximum objectivity is maintained in converting a case falling under 'Limited Scrutiny' into a 'Complete Scrutiny' case, the matter has been further examined and in partial modification to Para 3(d) of the earlier order dated 29.12.2015, Board hereby lays down that while proposing to take up 'Complete Scrutiny' in a case which was originally earmarked for 'Limited Scrutiny', the Assessing Officer ('AO') shall be required to form a reasonable view that there is possibility of under assessment of income if the case is not examined under 'Complete Scrutiny'. In this regard, the monetary limits and requirement of administrative approval from Pr. CIT/CIT/Pr. DIT/DIT, as prescribed in Para ?(d) of earlier Instruction dated 29.12.2015, shall continue to remain applicable. 3. Further, while forming the reasonable view, the Assessing Officer would ensure that: a. there exists credible material or information available on record for forming such view; b. this reasonable view should not be based on mere suspicion, conjecture or unreliable source; and c. there must be a direct nexus between the available material and formation of such view.” 13. However, on perusal of the notice for “Limited Scrutiny” we find that there was no mentioning/whisper about examination of the fact whether the assessee was engaged in the business of property development. Accordingly, we hold that the Assessing Officer has exceeded his jurisdiction by denying the deduction claimed under section 54 of the Act on the reasoning that the assessee is engaged in the business of property development as the same was not mandated under the ‘’Limited Scrutiny” notice issued under section 143(2) of the Act. 14. We are also conscious about the fact that this tribunal in the case of the co-owner namely Shri Harshadkumar Amrutlal Patel in ITA No. 361/AHD/2019 has decided the issue against the assessee on merit. Accordingly, the question arises once the issue involved in the case of the co-owner has been decided against the assessee, then can the Bench take of contrary view from the case of other co-owners. However, we find that the technical issue raised by the assessee in the case on hand was not there in the case of co-owner namely Shri Harshadkumar Amrutlal Patel. Thus we are adjudicating the present appeal from altogether a different perspective. Thus, the question of taking the contrary view does not arise. 15. In the case of the other co-owner namely Shri Harshadkumar Amrutlal Patel there was the regular assessment under section 143(3) of the Act, whereas in the present case, it is the case of the Limited Scrutiny. Accordingly, we hold that the facts of the case on hand are different with the facts of the case in the case of Shri Harshadkumar Amrutlal Patel. As the issue involved is different, then the bench is not bound to follow the decision of the coordinate bench taken in the case of the co-owner. ITA nos.02 & 03/AHD/2023 A.Y. 2017-18 8 16. The Ld.DR before us has not brought anything on record justifying that the “Limited Scrutiny” was converted by the Assessing Officer under normal scrutiny after obtaining necessary approval from the appropriate authority. 17. We are also not convinced with the argument of the learned DR that the issue raised by the AO is limited to the activity of the sale of the property only. It is because if we admit the contention of the learned DR then the head of income from capital gain will also get change to the business income despite the fact that there was no question raised in the notice issued for the limited scrutiny under section 143(2) of the Act. The right course of action for the AO was to take the approval from the competent authority for expanding the scope of Limited Scrutiny to the regular assessment but he failed to do so. Thus, in our considered view inaction of the AO should not cause any harassment to the assessee. 18. In holding so we draw support and guidance from the order of the Hon’ble Chandigarh Tribunal in case of Rajesh Jain vs. ITO reported in 162 taxman 212 where it was held as under: The jurisdiction of the Assessing Officer in such cases where the notices are issued for limited scrutiny is confined to the claims he has set out in the notice for verification. This position of law was further elaborated by the CBDT in its Circular No. 8/2002, dated 27-8-2002. The CBDT Circular clarifies that the Assessing Officer does not have the powers to make the entire assessment of income in limited scrutiny cases. Now question had to be decided when the Assessing Officer does not have the powers while making limited scrutiny assessment to decide such issues which are not covered by the limited scrutiny notice, the Commissioner (Appeals) on appeal against limited scrutiny assessment can exercise the powers in excess of the power vested with the Assessing Officer. There is no doubt that the power of the Commissioner (Appeals) is co-terminus with the power of the Assessing Officer. So, however, in the instant case, when the Assessing Officer did not have the power to make a full-fledged assessment in limited scrutiny cases, the Commissioner (Appeals)’s power could not be enlarged beyond the power of the Assessing Officer in limited scrutiny cases. So, it was considered appropriate to remit the issue relating to allowance of depreciation in respect of the plinth to the file of the Assessing Officer for the purpose of fresh decision in accordance with law. Since the notice under section 143(2)(i ) was issued for limited scrutiny, the Assessing Officer was precluded from considering any other issue while making the assessment under section 143(3) under limited scrutiny. The decision of the Commissioner (Appeals) in considering the other claim of the assessee not covered in the notice issued under section 143(2)(i) for limited scrutiny was contrary to the provisions of the Act and, accordingly, was set aside. In view of the above and after considering the facts in totality as discussed above, we are not convinced with the finding of the authorities below. As such the entire issue should have been limited to the extent of the dispute raised in the notice under section 143(2) of the Act for the limited scrutiny but the AO in the present case has exceeded his jurisdiction as discussed above. Thus the ground of appeal of the assessee is allowed. 10.3 In view of the above, we hold that the AO while framing the assessment has exceeded his jurisdiction by making an addition of the cash deposit of the entire year as income of the assessee. Moving further, we note that the cash has ITA nos.02 & 03/AHD/2023 A.Y. 2017-18 9 been deposited during the demonetization period by the assessee for Rs. 16,56,500.00 which can only be considered for the purpose of determining the income. Admittedly, there were also withdrawals of cash deposit from the bank account as evident from the submission made by the assessee before Ld. CIT(A). The relevant extract of the submission of the assessee reads as under: Sr.No. Period Deposits Withdrawals 1. 01.04.2016 to 16.08.2016 Rs.69,24,200/- Rs.64,84,711/- 2. 16.08.2016 to 30.08.2016 Rs.6,75,100/- Rs.7,18,218/- 3. 01.09.2016 to 30.11.2016 Rs.19,11,100/- Rs.18,67,983/- 4. 01.11.2016 to 27.12.2016 Rs.30,83,870/- Rs.31,79,499/- 5. 01.02.2017 to 23.02.2017 Rs.25,03,670/- Rs.25,23,815/- 6. 02.03.2017 to 31.03.2017 Rs.58,58,100/- Rs.57,43,714/- 10.4 The above submission of the assessee has nowhere been doubted by the authorities below. Accordingly, we are of the view that the entire cash deposit cannot be treated as income of the assessee. It is also pertinent to note that the assessee has filed the income tax return while declaring an income of Rs. 3,14,870/- only. Out of such income, the income of Rs. 2,50,100/- was shown as income from the trading of vegetables as claimed by the assessee. 10.5 It is significant to note that the assessee has conceded to have earned commission income at the rate of 4% on the trading of vegetable receipts. As per the assessee the amount deposited in the bank account represents turnover then the gross income of the assessee can be worked out taking 4% of the cash deposited in the bank being Rs. 6,97,244/- only ( 4% of 1,74,31,100). However, we note that the assessee has already shown gross income from the activity of vegetable trading at Rs. 7,58,860.00 and net income of Rs. 2,50,100 after claiming certain expenses out of the gross income from the activity of vegetable trading. It appears that the assessee has duly shown the income from the vegetable trading after considering the transaction recorded in the bank. 10.6 Nevertheless, the dispute before us relates to the cash deposits of Rs. 16,56,500.00 during the demonetization period which to our understanding ITA nos.02 & 03/AHD/2023 A.Y. 2017-18 10 represents business receipts and therefore only a percentage of such deposits should be taken for calculating the income of the assessee. Thus, in the interest of justice and fair play, we are of the view that a lumpsum addition of Rs. 82,825.00 being 5% of Rs. 16,56,500 over and above the income declared, will serve justice to the assessee as well as revenue. Hence, the ground of appeal of the assessee is partly allowed. In the result, the appeal filed by the assessee is allowed. Now coming to the ITA No. 03/Ahd/2023 for AY 2017-18, an appeal by the assessee. 11. The only issue raised by the assessee is that the Ld. CIT(A) erred in confirming levy of penalty of Rs. 20,000/- under the provision of section 271A1D of the Act. 12. The AO during the assessment proceedings has issued notices u/s 143(2) and 143(1) of the Act, but there was no compliance. Therefore, the AO levied the penalty of Rs.10,000/- for each default aggregating to Rs. 20,000/- u/s 272A(1)(d) of the Act. 13. On appeal before the Ld. CIT(A), the assessee submitted that he is illiterate person and not well versed with the income tax proceedings. Therefore, there was reasonable cause and consequently the penalty should be waived off u/s 273-B of the Act. However, the Ld. CIT(A), confirmed the penalty levied by the AO by observing as under: I have gone through the grounds of appeal, statement of facts and submissions of the appellant. It is submitted that no physical notices are received. The assessing officer has submitted that online notices have been sent through ITBA. Hence, the contention of the appellant is not acceptable. Hence, the Assessing Officer is justified in the levy of penalty u/s.271A(1) (d) of the Income Tax worth Rs.20,000/-.The order of the Assessing Officer is confirmed and the appeal of the appellant is confirmed. 14. Aggrieved by this, the assessee has come up in appeal before us. ITA nos.02 & 03/AHD/2023 A.Y. 2017-18 11 15. The ld. AR before us submitted that none of the notice was received by the assessee and so no compliance was made. According to the ld. AR, there was no intention of the assessee for non-compliance of the notices issued upon it. 16. On other hand, the learned DR before us vehemently supported the order of the authority below. 17. We have heard the rival contentions of both the parties and perused and carefully considered the materials on record. At the outset it was observed that in the identical facts and circumstances, the Delhi Tribunal has decided the issue in favour of assessee in part in the case of Smt. Rekha Rani Vs. DCIT in ITA No. 6131/DEL/2013 by observing that penalty for the first default of non-compliance of notice under section 142(1) of the Act was sufficient enough. The relevant extract of the order reads as under: 5. We have considered the submissions of learned DR and have perused the order of the Assessing Officer and the learned CIT(A). we find that there was no reasonable cause on the part of the assessee for not appearing on the different dates of hearing before the Assessing Officer in response to notice issued under Section 143(2) of the Act. However, we find that the default is same and, therefore, penalty of Rs. 10,000/- could be imposed for the first default made by the assessee in 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 issued 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 "best judgement assessment" under the provisions of Section 144 of the Act and not to impose penalty under Section 271(1)(b) of the Act again and again. In this view of the matter, we restrict the penalty levied under Section 271(1)(b) of the Act to the first default of the assessee in not complying with the notice under Section 143(2) of the Act. Accordingly, the penalty imposed is restricted to Rs. 10,000/- as against Rs. 50,000/- confirmed by the learned CIT(A). The grounds of appeal of the assessee are thus partly allowed. 17.1 Respectfully following the aforesaid order of Delhi Tribunal, we set aside the order of Ld. CIT(A) and direct the AO to delete the penalty to the tune of ₹ ITA nos.02 & 03/AHD/2023 A.Y. 2017-18 12 10,000/- and confirm the penalty of ₹ 10,000/-only. Hence, this ground of assessee’s appeal is partly allowed. 18. In the result, both the appeals of the assessee are partly allowed. Order pronounced in the Court on 07/07/2023 at Ahmedabad. Sd/- Sd/- (T.R SENTHIL KUMAR) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER (True Copy) Ahmedabad; Dated 07/07/2023 Manish
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