The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) found that the Commissioner of Income Tax (Appeals) [ CIT(A) ] failed to provide evidence of notice served and subsequently deleted the penalty under Section 271(1)(b) of the Income Tax Act, 1961.
This appeal was filed by the assessee against the order of the CIT (Appeals)-NFAC, Delhi dated 18.01.2023 for the AY 2012-13 in sustaining the penalty levied under Section 271(1)(b) of the Income Tax Act for noncompliance of the notice issued under Section 142(1) of the Income Tax Act dated 31.07.2019.
The assessee has relied on the judgment of Jurisdictional Allahabad High Court In the case of Suresh Kumar Sheetlani vs. ITO wherein it was held “Notice served at the wrong address renders reassessment proceedings invalid.
The bench noticed that a penalty was levied for non-compliance of notice under Section 142(1) of the Income Tax Act dated 31.07.2019. It was the contention of the assessee that none of the notices including notice under Section 148 of the Income Tax Act were not served on the assessee as they were sent to old address even though the assessee filed returns for the assessment year under consideration and also for the immediately preceding assessment year i.e. 2011-12 mentioning the new address i.e. 94-95, Chanakyapuri, Meerut.
Further observed that penalty was sustained for the reason that the assessee did not inform the Assessing Officer about change in address. It was not in agreement with the CIT (A)-NFAC as the assessee filed returns for the assessment years 2011-12 & 2012-13 mentioning the new address i.e. 94-95, Chanakyapuri, Meerut. However, the assessment was completed under Section 144/147 of the Income Tax Act dated 12.12.2019.
The two member bench of the tribunal comprising Dr. B.R.R. Kumar (Accountant member) and C.N. Prasad (Judicial member) observed that there was no finding in the penalty order whether the notice dated 31.07.2019 issued under Section 142(1) of the Income Tax Act was either served on the assessee.
Even the CIT (A) also did not give a finding as to whether the notice was served on the assessee. In the circumstances, it cannot be presumed that the notice was served on the assessee and the assessee did not comply with such notice. Thus, this was not a case for levy of penalty for non-compliance. Thus, ITAT deleted the penalty under Section 271(1)(b) of the Income Tax Act. Accordingly, appeal of the assessee was allowed.
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