RANJAN SHARMA, JAIPUR V. ITO WARD 6(2), JAIPUR, JAIPUR

ITA 227/JPR/2021

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 7976 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 31-10-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause; Non compliance
• Section: 271(1)(c); 144; 142(1); 274; 143(2); 142(2A)

Judgement Text

vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR MkWa- ,l-lhrky{eh] U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ ITA. No. 227/JP/2021 fu/kZkj.k o"kZ@Assessment Years : 2014-15 Ranjan Sharma 1701, 17 th Floor D Wing, Orchid Suburbia-3, Link Road Kandivali (West), Mumbai- 400067. cuke Vs. ITO, Ward-6(2), Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: BRFPS7660P vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri R.S. Poonia (C.A.) jktLo dh vksj ls@ Revenue by : Smt. Runi pal (Addl.CIT) a lquokbZ dh rkjh[k@ Date of Hearing : 22/02/2022 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 25/02/2022 vkns'k@ ORDER PER: DR. S. SEETHALAKSHMI, J.M. This appeal of the assessee is directed against the order dated 06.09.2021 of ld. CIT(A), arising from penalty order passed U/s. 271(1)(b) of the Income Tax Act, 1961 (in short the “Act”) for the AY 2014-15. 2. The assessee has raised the following grounds:- “1. That under the facts and in the circumstances of the case the Ld. CIT(Appeals) has erred in law and facts in confirming the penalty of Rs. 10,000/- imposed by Ld. Assessing Officer under section 271(1)(b) of the I.T. Act, 1961 which is wrong, unwarranted and bad in law. Kindly delete the same. ITA No. 227 /JP/2021 Ranjan Sharma vs. ITO 2 2. That the appellant craves permission to add to or amend to any of the above grounds of appeal or to withdraw any of them.” 3. Brief facts of the case are that the assessee filed his e-return for the financial year 2013-14 relevant to assessment year 2014-15 on 26.11.2014 declaring his total income of Rs. 47,03,010 The case was selected for scrutiny under CASS accordingly notice U/s 143(2) of the IT. Act was issued on 31.08.2015 by the ITO, Wrad-6(2), Jaipur fixing the case for hearing on 12.10.2015. This notice was duly served upon the assessee through registered post. Thereafter vide order U/s 127 dated 10.06.2016, the Pr.CIT-2, Jaipur assigned this case to ACIT, Circle-4, Jaipur and in consequence to order U/s 127 the ACIT, Circle-6 transferred this case to ACIT, Circle 4, Jaipur. Notice U/s 142(1) alongwith query letter was issued on 25.10.2016 requiring the assessee to furnish the information on 04.11.2016. But in response to this notice neither any attended nor required information filed. Since the assessee did not comply the notice issued U/s 142(1), show cause notice U/s 144 was issued to assessee on 24.11.2016 to show cause as to why assessment in his case should not be completed U/s 144 of the I.T. Act on the basis of information/material available with the department. An opportunity of being heard was provided to the assessee to attend the office of the undersigned on 30.11.2016. But again on 30.11.2016 neither any attended nor any information was filed. 4. The AO arrived the findings that the asessee did not comply with the notices issued and served upon it. The Assessing Officer upon the following judgments for passing the best judgment assessment order U/s 144 of the IT Act, 1961. In this case mentioned below, it has been held that if the assessee does not comply with the statutory notices, ex-parte assessment order U/s 144 of the Act can be passed by the competent authority and further noted that in the absence of ITA No. 227 /JP/2021 Ranjan Sharma vs. ITO 3 adequate explanations by the assessee who has failed to discharge its onus. Therefore, Penalty proceeding U/s 271(1)(c) is initiated for furnishing inaccurate particulars of income and concealing his income. Notice U/s 271(1)(c) read with section Under section 142(1) of the Income Tax Act, 1961, penalty proceedings U/s 271(1)(b) of the IT Act, 1961 is initiated and notice 271(1)(b) read with section 274 was issued. 5. Being aggrieved by the assessment order, the assessee preferred an appeal before the CIT(A).Before the CIT(A), the assessee has reiterated its arguments in written submission in page 2 and 3 of the order. The CIT(A) for the reasons stated in his order has rejected the arguments and submissions made by the assessee. 6. The ld. CIT(A) observed that no reply has been filed or no one attended during penalty proceedings. During appellate proceedings, the assessee has not disputed any facts mentioned in the penalty order. The assessee has not given any reason, leave apart valid reason, for non-compliance to notice U/s 142 dated 25.10.2016. Therefore, it is decided that assessee has consciously not complied notice U/s 142 of the Act, Hence, the penalty order U/s 271(1(b) r.w.s. 274 of the Act is upheld. Therefore, ground of appeal is dismissed. 7. Aggrieved by the CIT(A) order, the assessee is in appeal before us. Before the CIT (A), the assesee has reiterated that regarding non compliance of notice issued under section 142(1), it was submitted that since his PAN based at Rajasthan and Registered Office at Mumbai, sometimes there were delay in communication due to constant address change of Ranjan Sharma that time due to rented premises. Therefore, the notices issued by the AO could not be served on the assessee. The assessee submitted that in the appellate ITA No. 227 /JP/2021 Ranjan Sharma vs. ITO 4 proceedings, he furnished the relevant documents to show that the assessee shifted his rental premises and therefore, in the absence of service of notice issued by the AO, the assessee could not comply with the notice under section 142(1).The assessee further submitted that detailed written submission and the assessment order was produced before the Ld. CIT(A) and the same has been reproduced and taken into consideration in the Ld. CIT (A) order also. 8. On the other hand, Ld. DR strongly supporting the order of the CIT(A) and submitted that there is no merit in arguments taken by the Ld. AR of the assessee and the AO has rightly taken has a fit case for imposition of penalty U/S 271(1)(b) of the Act. 9. We have heard both the parties, perused materials available on record and gone through orders of the authorities below. The Ld AR of the assessee submitted documentary evidence of Aadhar Card and the Affidavit dated 14.02.2022 of the assessee for considering as their PAN based at Rajasthan and Registered office at Mumbai. We are of the view that the AO had levied the penalty @ Rs. 10,000/- each for non compliance of notices Under section142(1) of the Act. As it was clear from the provisions of Section 271(1)(b) that this provision can be invoked only for non compliance of notice Under section 115WD (2) or Section 115WE(2) or Section 142(1) or 143(2) or directions issued Under section 142(2A) of the Act. Therefore, other than the default committed by the assessee specified in the clause (b) of section 271(1) the non compliance to the other notices or directions would not attract the penalty Under section 271(1)(b) of the Act. Accordingly, the penalty levied Under section 271(1)(b) for non compliance of notice the same was not served with any of the notices issued by the AO due to the change of address. 10. As regards the penalty levied for non compliance of notice Under section 142(1), the Tribunal opined that the assessee was not served with any ITA No. 227 /JP/2021 Ranjan Sharma vs. ITO 5 of the notices issued by the AO due to the change of address. Further, we have perused the documentary evidence of assessee’s Aadhar Card for the change of address and Affidavit of the assessee dated 14.02.2022 in which there was reasonable cause principle. As regards the penalty levied for non compliance of notice under section 142(1) of the Act. In our considered opinion, that the assessee was not served with any of the notices issued by the AO due to the change of address and since the assessee had not filed any return of income. Therefore, the AO was not having the present address of the assessee. Hence, when the notice issued Under section 142(1) was not served upon the assessee, and the AO had not conducted further enquiry regarding the current address of the assessee, then in the facts and circumstances of the case that the assessee had already furnished the current address in his letter dated 23.08.2021, the reasons explained by the assessee were bonafide and reasonable. 11. Therefore, we set aside the order passed by ld. CIT(A) and the penalty imposed Under section 271(1)(b) of the Act for non compliance of Section 142(1) is deleted. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 25/02/2022. Sd/- Sd/- ¼ jkBksM deys'k t;UrHkkbZ ½ ¼,l-lhrky{eh½ ( RATHOD KAMLESH JAYANTBHAI) (Dr. S. Seethalashmi) ys[kk lnL; @ Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 25/02/2022. *Santosh vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. vihykFkhZ@The Appellant- Ranjan Sharma, Mumbai. 2. izR;FkhZ@ The Respondent- ITO, Ward-6(2), Jaipur. ITA No. 227 /JP/2021 Ranjan Sharma vs. ITO 6 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur. 6. xkMZ QkbZy@ Guard File { ITA No. 227/JP/2021} vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar