Vineet Kumar, New Delhi V. ITO WARD - 50(1), New Delhi

ITA 6258/DEL/2019

AI Insights

The case involves an appeal by Shri Vineet Kumar against the penalty imposed by the Income Tax Officer for non-compliance with statutory notices under section 142(1) of the Income Tax Act, 1961, during the assessment year 2010-11. The penalty was initially set at Rs. 50,000 but was reduced to Rs. 40,000 by the Commissioner of Income Tax (Appeals) due to the assessee's circumstances, including the severe illness and eventual death of his father, which the assessee claimed prevented him from receiving the notices and complying with them. The Tribunal, after considering the circumstances and the lack of evidence that the notices were served, ruled in favor of the assessee, citing a reasonable cause for non-compliance.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129823 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 19-09-2022
• Assessment Year: 2010-2011
• Appeal Filed On: 23-07-2019
• Other Referred Cases: Harvinder Singh Jaggi Vs. ACIT [(2014) 48 taxmann.com 121 (Delhi\u2013Trib)]
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause
• Section: 273B; 142(1); 48

Judgement Text

ITA. No. 6258/Del/2019 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “H” NEW DELHI BEFORE SHRI G. S. PANNU, PRESIDENT A N D SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER आ.अ.सं .I.T.A No. 6258/Del/2019 िनधाᭅरण वषᭅ/Assessment Year: 2010-11 Shri Vineet Kumar, H-48, West Patel Nagar, Delhi–110 008. बनाम Vs. Income Tax Officer, Ward : 50 (1) New Delhi. PAN No. ANVPK9076G अपीलाथᱮ/ Appellant ᮧ᭜यथᱮ/ Respondent िनधाᭅᳯरतीकᳱओरसे / Assessee by : Shri V. Rajkumar, Adv.; राज᭭वकᳱओरसे / Department by : Shri M. Baranwal, Sr. D.R.; & Shri Sanjay Kumar, Sr. D. R.; सुनवाईकᳱतारीख/ Date of hearing : 21.04.2023 उ᳃ोषणाकᳱतारीख/Pronouncement on : 29.05.2023 आदेश / O R D E R PER C. N. PRASAD, J.M. 1. This appeal is filed by the assessee against the order of the ld. Commissioner of Income Tax (Appeals)-17 [hereinafter ITA. No. 6258/Del/2019 2 referred to CIT (Appeals)] New Delhi, dated 29.05.2019 for assessment year 2010-11. 2. The assessee has raised the following substantive ground of appeal:- “On the facts and in the circumstances of the case and in law the ld. CIT (Appeals) erred in confirming the penalty imposed by the Assessing Officer under section 271(1)(b) of the Income Tax Act, 1961 to the extent of Rs.40,000/-.” 3. The ld. Counsel for the assessee submits that the statutory notices mentioned above were never served on the assessee; that the father of the assessee was severely sick; that the father of the assessee eventually passed away at the relevant time; and that due to the absence of the assessee from the premises the notices issued by the AO remained unserved on him and so the assessee had no knowledge of the fixation. Considering the explanation as stated above the Ld. CIT (Appeals) reduced the penalty to Rs.40,000/- instead of Rs.50,000/- as originally imposed by the AO vide his order dated 26.06.2018. 4. The Ld. Counsel submits that Ld. CIT (Appeals) observed that "Section 273B does provide that penalty is not to be imposed if the assessee has reasonable cause for non- compliance." Thus, even according to the Ld. CIT (Appeals), if there was a reasonable cause for non-compliance, there would be room u/s 273B of the Act not to impose any penalty. The Ld. CIT (Appeals) observed in para 6.6 of the impugned order that "I find that the assessee has failed to explain the reasons for non-compliance" which observation is ITA. No. 6258/Del/2019 3 apparently wrong because in the order at para 6.3 the causes cited by the assessee for non-compliance are duly reproduced by the Ld. CIT (Appeals) herself which all seem to have been ignored by her subsequently while passing the order. 5. The ld. Counsel further submits that in view of the fact that the Ld. CIT (Appeals) has omitted to note the reasonable cause as pleaded before her and has confirmed the penalty by observing that assessee has failed to explain the reason for non-compliance, the order of the Ld. CIT (Appeals) is apparently misdirected and wrong. That apart the non-receipt of notices being an adequate cause for non-compliance which the Ld. CIT (Appeals) has failed to recognise, the further fact of the preoccupation of the assessee in attending to his ailing father with the eventual demise of his father are all further facts constituting sufficient cause for condoning the penalty which has been missed out by the Ld. CIT (Appeals). It was submitted that the ground as raised be allowed and the penalty of Rs.40,000/- imposed u/s 271(1)(b) of the Act be deleted. 6. The ld. Counsel for the assessee placed a paper book containing written submissions before the ld. CIT (Appeals) and death certificate together with medical documents and also relied on the decision of the co-ordinate bench of the Tribunal in the case of Harvinder Singh Jaggi Vs. ACIT [(2014) 48 taxmann.com 121 (Delhi–Trib)]. 7. On the other hand, the ld. DR relied on the orders of the authorities below. ITA. No. 6258/Del/2019 4 8. Heard rival submissions perused the orders of the authorities below. We observe that the Assessing Officer in the penalty order given the summary of statutory notices issued and compliance thereof as under:- S.No. Date Description of Notice Date of hearing Remarks. 1. 11.07.2017 u/s 142(1) 20.07.2017 No compliance was made. 2. 08.09.2017 u/s 142(1) 15.09.2017 No compliance was made. 3. 11.10.2017 u/s 142(1) 17.10.2017 No compliance was made. 4. 07.11.2017 u/s 142(1) with final opportunity. 14.11.2017 No compliance was made. 5. 24.11.2017 u/s 142(1) along with show cause notice u/s 144. 30.11.2017 No compliance was made. It is also observed by the Assessing Officer that there was no compliance on the date of hearing though notice was sent through Speed Post. However, it is observed that there is no finding by the Assessing Officer that any of the above notices was served on the assessee and the assewssee did not comply. Even before us no evidence was furnished by the Revenue suggesting that the above notices were in fact served on the assessee and there was no compliance by assessee. The submission of the assessee that he was attending to his ailing father and no notice was served on him as he was not residing in the premises cannot be brushed aside in view of the death certificate of his father who passed away on 22.02.2018 ITA. No. 6258/Del/2019 5 and medical reports dated 18.05.2017 and 09.08.2017. All this goes to show that there is reasonable cause for non-compliance of the above notices even assuming they were served. In the circumstances we hold that this not a fit case for levy of penalty under section 271(1)(b) of the Act and direct the Assessing Officer to delete the penalty. The ground raised by the assessee is allowed. 9. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on : 29/05/2023. Sd/- Sd/- ( G. S. PANNU ) ( C. N. PRASAD ) PRESIDENT JUDICIAL MEMBER Dated : 29/05/2023 *MEHTA* Copy forwarded to : 1. Appellant; 2. Respondent; 3. CIT 4. CIT (Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, New Delhi. Date of dictation 22.05.2023 Date on which the typed draft is placed before the dictating member 23.05.2023 ITA. No. 6258/Del/2019 6 Date on which the typed draft is placed before the other member 29.05.2023 Date on which the approved draft comes to the Sr. PS/ PS 29.05.2023 Date on which the fair order is placed before the dictating member for pronouncement 29.05.2023 Date on which the fair order comes back to the Sr. PS/ PS 29.05.2023 Date on which the final order is uploaded on the website of ITAT 29.05.2023 Date on which the file goes to the Bench Clerk 29.05.2023 Date on which the file goes to the Head Clerk The date on which the file goes to the Assistant Registrar for signature on the order Date of dispatch of the order