The Income Tax Appellate Tribunal (ITAT), Jaipur bench has quashed a penalty order on the ground that the notice proposing the same was not served on the assessee due to change of address.
On the basis of information in possession of the department and after recording reasons to belief the assessment has been reopened u/s 147, and notice u/s 148 of the Income Tax Act, 1961 was issued on 17.03.2015 which was served upon the assessee, Ms. Asha Yadav, through postal authorities. however, the same was not served on the assessee.
The assessing officer completed in terms of provisions of Section 144 of the Income-Tax Act, 1961 on the basis of the material available on record. Later, Penalty proceeding U/s 271(1)(c) is initiated for furnishing inaccurate particulars of income and concealing his income. Notice U/s 271(1)(c) read with section Under section 142(1) of the Income Tax Act, 1961, penalty proceedings U/s 271(1)(b) of the IT Act, 1961 is initiated and notice 271(1)(b) read with section 274 was issued.
The department contended that if the assessee does not comply with the statutory notices, ex-parte assessment order U/s 144 of the Act can be passed by the competent authority and further noted that in the absence of adequate explanations by the assessee who has failed to discharge its onus.
Quashing the penalty order, the Tribunal bench comprising Dr. S. Seethalakshmi, JM & Shri Rathod Kamlesh Jayantbhai, AM has observed that “in our considered opinion, that the assessee was served with the notices issued by the AO which was not known by the assessee due to the change of addresses . Further considering the facts and circumstances of the case that the assessee had already furnished the current address in his letter dated 13.10.2021, the reasons explained by the assessee were bonafide and reasonable before the CIT (A) and which was not taken in consideration.”
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