Assessee unable to Comply to the Notices of Higher Authorities as it was Sent at Incorrect Address: ITAT Deletes Penalty u/s 271(1)(b) of Income Tax Act [Read Order]

The Jaipur Bench of Income Tax Appellate Tribunal (ITAT) held the assessee was deprived off to contest the case before the lower authorities being not receipt of notices at the correct address concerning in her case, thus deleted the the penalty of Rs.10,000 made under Section 271(1)(b)of the Income Tax Act,1961.

The assessee Sakku Devi is illiterate rural lady and she is house wife only. She is living at Bhoyan, Tehsil-chaksu, Jaipur Rajasthan. The assessee is the not the part of Hindu Undivided family of parents’ home due to her marriage. During the considering year all the family members of parents’ home had sold their ancestral agricultural land situated at Patwar Muhana, tehsil sangnaer, Jaipur Khasra in the consideration of Rs. 4,04,0,9,600 to Mr. Prahlad Agarwal and others.

During the assessement proceeding Assessing Officer (AO) stated that the assessee has not made compliance to the notice/ show cause notice issued under Section 271(1)(b) of the Income Tax Act and thus imposed the penalty of Rs 10,000 for default of notice under Section under Section 142 (1) of the Income Tax Act.

Aggrieved by the order the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)], which confirmed the order of the AO observing during the appellate proceedings also the assessee has failed to furnish any reasonable cause for non compliance to statutory notices under Section 142(1) of the Income Tax Act issued by the AO.

Further aggrieved the assessee filed an appeal before the Tribunal. The Authorised Representative of the assessee (AR) Yogesh Kumar Sharma, stated that AO has passed ex-parte assessment order without providing adequate opportunity of being heard to the assessee and further submitted that a penalty order was also passed by the AO, under Section 271(1)(b) of the Income Tax Act imposing penalty of Rs.10,000 which was confirmed by the  CIT(A).

The Departmental Representative (DR) Monisha Choudhary, supported the order of the CIT (A) who sustained the penalty of Rs.10,000 under Section 271(1)(b) of the Income Tax Act.

The Bench comprising of DR. S. Seethalakshmi, Judicial Member and  Rathod Kamlesh Jayantbhai, Accountant Member observed that the assessee being an illiterate rural lady who is living at Bhoyan Tehsil-Chaksu, Jaipur (Raj) could not pursue her case before the lower authorities and simultaneously she could not comply with the notices issued to her being not received at her correct address. It indicates that the assessee remained deprived off to contest the case before the lower authorities.

Therefore as the object of the Bench is to provide justice to the assessee but in this case it appears that the assessee was deprived off to contest the case before the lower authorities being not receipt of notices at the correct address concerning in her case.

The Tribunal reffered the decision of ITAT ‘’G’ Bench, New Delhi in the case of Simple Singh vs ITO Ward where it allowed the appeal of the assessee in such similar circumstances.

Therefore the Bench allowed the appeal of the assessee by deleting the penalty of Rs.10,000 made under Section 271(1)(b)of the Income Tax Act. Thus the appeal of the assessee is allowed.

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