The Kolkata Bench of the Income Tax Appellate Tribunal ( ITAT ) upheld the penalty for non-compliance with assessing officer notices stating that the assessee being an Indian Oil Corporation employee failed to fulfill tax obligations despite being aware of procedural responsibilities.
Ashutosh Das, the assessee is a co-owner of inherited property located at Mouza-Khantpukur, Durgapur Municipality, West Bengal. The property was subjected to a Joint Development Agreement (JDA) with Samridhi Housing Pvt. Limited, executed on January 27, 2015.
The Assessing Officer determined the fair market value of the property on the date of the agreement to be Rs. 2,61,82,546 and added 1/4th of the value (₹65,45,637) as capital gains to the assessee’s income and issued notice for explanation.
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The Assessing Officer (AO) imposed a penalty of Rs. 10,000, for the assessee failed to appear or respond to a notice dated February 21, 2023, uploaded on the e-filing portal. On appeal, the Commissioner of Income Tax (Appeals) CIT(A) upheld the penalty.
Aggrieved, the assessee appealed before the ITAT challenging the Commissioner of Income Tax (Appeals)’s order. The assessee’s counsel argued that the notice was not duly served but was merely uploaded on the portal which may not constitute proper service under the law.
On the other hand, the revenue counsel argued that the assessee did not comply with notices and the AO visited the assessee with a penalty for non-compliance with the notice dated 21.02.2023 and imposed a penalty of Rs.10,000.
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The two-member bench comprising Rajpal Yadav (Vice President) and Rajesh Kumar (Accountant Member) observed that the assessee is an employee of Indian Oil Corporation and was aware of his tax responsibilities having declared an income of Rs. 13,57,830.
The tribunal observed that the assessee failed to provide any plausible explanation for the non-compliance with the notices. The tribunal confirmed the penalty imposed under Section 271(1)(b) of the Income Tax Act, 1961.
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