Penalty u/s 271(1)(b) quashed as notice u/s 142(1) issued but no finding of being served  

Penalty u/s 271(1)(b) quashed as notice u/s 142(1) issued but no finding was as to if it was served on assessee.

ABCAUS Case Law Citation
ABCAUS 3613 (2023) (10) ITAT

In the instant case, the assessee had challenged the order passed by the CIT(A) in confirming penalty u/s 271(1)(b).

The assessee was an individual and di not file return of income as his income was below the taxable limit.

On the basis of AIR information, the case was opened u/s 148 of the Act. However, the assessee had shifted from his previous address and notice u/s 148 and 142(1) was not received by the assessee.

The assessment was completed u/s 144. The Assessing Officer (AO) issued show cause for the penalty proceedings u/s 271(1)(b) which was also not received by the assessee.

The AO imposed penalty u/s 271(1)(b) being defaults made for non-compliance of notices on seven occasions.

It was also the contention of the assessee that he came to know about even the ex parte assessment order passed u/s 144 of the Act and the payment outstanding against him only when the TRO contacted over phone and he met the TRO and the AO in person.

The case of the assessee was that since the assessee has not received any notice u/s 148 or 142(1) of the Act there was no justification in levying the penalty by the Assessing Officer and confirming by the CIT(A).

The ITAT observed that the penalty order nowhere stated that the notices issued u/s 142(1) of the Act were served on the assessee.  In the entire penalty order the notices said to have been issued by the AO but it is not the finding of the AO that anyone of such notices were served on the assessee.

Further, the Tribunal observed that the provisions of Section 271(1)(b) does not stipulate levying any penalty for not responding to notice u/s 148 of the Act.

Accordingly, the Tribunal directed the AO to delete the penalty levied u/s 271(1)(b) of the Act.  

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