No Proof of Delivery and Service of Notice: ITAT deletes Penalty [Read Order]

The Income Tax Appellate Tribunal (ITAT), Jaipur deleted penalty as there was no proof of delivery and service of notice.

The penalty has been imposed by the AO for non-compliance of a single notice under section 142(1) of the income tax act issued during the assessment proceedings under section 147/143(3). The NFAC confirmed the action of AO. The Counsel for the assessee, made written submission wherein he stated that the appellant, Kusum Mittal had duly submitted before the AO as well as the NFAC through an affidavit that till the completion of the assessment proceedings, she had never received any notice. Therefore, ex-party assessment as well as penalty for non-compliance of notice under section 271(1)(b) is illegal and both are liable be deleted. However, both the authorities failed to consider the submissions of the appellant.

The Counsel also submitted that in order to ascertain the true facts of service of all the notice, the appellant applied to the AO for obtaining certified copy of the proceedings sheet along with detail of service of notice issued during the assessment proceedings which was provided. The AO, however, admitted that details of mode of delivery and proof of delivery were not available on the assessment record.

It was submitted that in the absence of any proof for delivery and service of impugned notice dated 24.05.2019 the department cannot make a case that the notice was delivered and served on the appellant. No case can be made out against the appellant that she failed to comply with the notice. Accordingly, the penalty imposed for non-compliance of notices is liable to set aside.

A Single Bench consisting of Sandeep Gosain, Judicial Member observed that We are of the view that since there is no proof of delivery and service of notice under section 142(1), therefore, in our view no penalty is attracted under section 271(1)(b) of the Act. The penalty is deleted.”

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