NARESHKUMAR BABUBHAI SUTARIYA,AHMEDABAD V. THE ITO, WARD-7(2)(1), AHMEDABAD

ITA 1992/AHD/2024

AI Insights

The case involves Nareshkumar Babubhai Sutariya, the appellant, who appealed against the penalty imposed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, for non-compliance with notices issued under Sections 142(1) and 148 during the assessment year 2013-14. The notices were allegedly sent to an old address, leading to non-compliance. The CIT(A) upheld the penalty, stating that the notices were duly served and it was the appellant's responsibility to update his address. The Tribunal, however, found that the assessee had a reasonable cause for not complying with the notices, as he was not residing at the address to which the notices were sent.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312821 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRATEEK SHARMA
• Assessee Lawyers: S.N. DIVATIA; SAMIR VORA; REGISTERED
• Keywords: Reasonable cause
• Section: 142(1)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE: SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER आयकर अपील सं./I.T.A. No. 1992/Ahd/2024 (Ǔनधा[रण वष[ / Assessment Year : 2013-14) Nareshkumar Babubhai Sutariya 65/15/9/11 Dhulabhai ni chali, Old Vikram Mills, Rakhial Road, Ahmedabad, Gujarat - 380021 बनाम/ Vs. The Income Tax Officer Ward -7(2)(1), Ahmedabad Öथायी लेखा सं./जीआइआर सं./PAN/GIR No. : BISPS6899E (Appellant) .. (Respondent) अपीलाथȸ ओर से /Appellant by : Shri S. N. Divatia & Shri Samir Vora, A.Rs. Ĥ×यथȸ कȧ ओर से/Respondent by : Shri Prateek Sharma, Sr. DR Date of Hearing 05/02/2025 Date of Pronouncement 30/04/2025 (आदेश)/ORDER PER SMT. ANNAPURNA GUPTA, AM: The present appeal has been filed by the assessee against order passed by the Commissioner of Income Tax(Appeals), National Faceless Appeal Centre (NFAC), Delhi (in short ‘the CIT(A)’) confirming the levy of penalty under Section 271(1)(b) of the Income Tax Act, 1961 (in short ‘the Act’) dated 08.11.2024 pertaining to Assessment Year 2013-14. ITA No. 1992/Ahd/2024 [Nareshkumar Babubhai Sutariya vs. ITO] A.Y. 2013-14 - 2 – 2. The grounds raised in the appeal by the assessee are as under: “1.1 The order passed u/s. 250 passed 08.11.2024 for A.Y.2013-14 by r. NFAC, Delhi, for imposing penalty of Rs 30,000/- for alleged default of noncompliance to the notice issued u/s 142(1) on 28.08.2019, 19.09.2019 and 17.10.2019 is wholly illegal unlawful and without jurisdiction. 1.2 The Ld. CIT(A) has grievously erred in law and or on facts in not allowing sufficient opportunity before passing the impugned order of penalty. 1.3 The Ld. CIT(A) has grievously erred in law and or on facts in imposing penalty of Rs 30,000/- for alleged default of non- compliance to the notices issued u/s 142(1).” 3. The grievance raised by the assessee in the present appeal is against the confirmation of penalty levied u/s. 271(1)(b) of the Act amounting to Rs.30,000/- for not complying with the notices issued during assessment proceedings. The fact that the assessee did not respond to three notices issued to him during assessment proceedings u/s.148, 142(1) and the show cause notice issued by the AO during assessment proceeding is not disputed. What is disputed before us is the non-acceptance of the sufficient cause demonstrated by the assessee before the Ld. CIT(A) for not complying to the aforesaid notices. 4. It was pointed out that the assessee had given reasons for non-compliance of the aforesaid noticed as being sent on his old address where his brother along with his old parents resided, who had not informed or handed over the notices to him. The Ld. ITA No. 1992/Ahd/2024 [Nareshkumar Babubhai Sutariya vs. ITO] A.Y. 2013-14 - 3 – CIT(A) has found the plea of the assessee be totally unacceptable holding at para 5.4 of his order as under: “5.4 I have perused the penalty order and submission of the appellant and fact of the case. The appellant has claimed that the manual notices was sent on old address where his bother Sh Mahendra B. Sutariya and old parents residing and they were not informed or handed over the notices taken by the residents of this place. It is undisputed fact that the notices issued by the AO was duly served to the appellant on the address of the appellant. It is important to note that the all the notices were also issued to the appellant on the e-mail registered/designated with e-filling portal. In this context, it is noted that the address at which the notices have been delivered by speed post by the AO are the last known addresses available with the Department and moreso none of the said notices have returned undelivered. It is the responsibility of the appellant to update his/her address in the Department database. Further, it is noted that during penalty proceedings the AO referred the matter to verification unit (VU) of the Department for manual service of notice. VU vide communication dated 21.12.2021 informed the AO that notice has been sent through speed post with Tracking ID: EG127761578IN. It is further noted that the appellant has himself accepted that the notices was received on the old address of the appellant. The appellant has also received SMS alert on his mobile and emails on his registered email ID regarding the issuance of notices by the Department. Hence, it is an undisputed fact that the notices were duly delivered to the appellant through all possible modes of communication. Plea of the appellant in present era is totally unacceptable especially in light of the fact that the main case of the appellant was reopened on ground of purchase of immovable property during FY 2012-13 relevant to AY 2013-14. Therefore, the claim of the appellant that sufficient opportunity was not provided to the appellant is also not acceptable.” 5. As is evident from the perusal of the above, the Ld. CIT(A) has not accepted the assessee’s explanation stating that the notices were served at the last known address of the assessee by registered post and none of them have returned back undelivered: that it is the responsibility of the assessee to update his address. The Ld. ITA No. 1992/Ahd/2024 [Nareshkumar Babubhai Sutariya vs. ITO] A.Y. 2013-14 - 4 – CIT(A) has also stated that sufficient opportunity was provided to the assessee. 6. We find that none of the reasons given by the Ld. CIT(A) impinges in any way on the sufficiency of cause adduced by the assessee before him for not complying with the notices issued during assessment proceedings. The fact that the notices were issued at the registered address/last known address of the assessee or for that matter the notices were not returned back unserved doesn’t take away the fact that the assessee was not residing at that address at all as stated by him before the Revenue authorities. And this fact has not been found to be false/untrue by the Ld. CIT(A). 7. In the light of the same, we do not agree with the Ld. CIT(A) that there was no sufficient cause given by the assessee for non- complying with the assessment notices. On the contrary, we find that the assessee had given reasonable cause for not complying with the same and no infirmity being pointed out by either the AO or the Ld. CIT(A) in the said explanation, there is no reason at all we hold, to reject the same as non-acceptable. 8. In the light of the same, we hold that there is no case for levy of penalty for non-compliance of notices. ITA No. 1992/Ahd/2024 [Nareshkumar Babubhai Sutariya vs. ITO] A.Y. 2013-14 - 5 – 9. The penalty, therefore, levied amounting to Rs.30,000/- is directed to be deleted. 10. In the result, appeal filed by the assessee is allowed. This Order pronounced on 30/04/2025 Sd/- Sd/- (T.R. SENTHIL KUMAR) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 30/04/2025 S. K. SINHA True Copy आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant 2. Ĥ×यथȸ / The Respondent. 3. संबंͬधत आयकर आयुÈत / Concerned CIT 4. आयकर आयुÈत(अपील) / The CIT(A)- 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड[ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलȣय अͬधकरण, अहमदाबाद / ITAT, Ahmedabad "