INCOME TAX ACT, 1961

Section 271(1)(d)

Penalty under section 271(1)(d) - Leviability - Assessee not filed return of Fringe Benefit Tax (FBT) -

AO alleged that assessee had not filed return of Fringe Benefit Tax (FBT) even though the same was applicable to it. Therefore, re-assessment proceedings were initiated and notice under section 115WH was issued. Even after adequate opportunities, neither the assessee filed the return nor furnished any details. Hence, penalty proceedings under section 271(1)(d) were initiated. On assessee's submission that it had not received any notice, certified copies of the assessment order, demand notice and penalty notices were given to the assessee but still it had not made any submission on levy of penalty. Accordingly, penalty was levied under section 271(1)(d). Assessee contended that penalty under section 271(1)(d) could not be levied as it was not aware of the FBT provisions. Revenue did not consider the reason given by the assessee as proper. Held: Notice under section 115WH was issued to the assessee but it had not filed any return of income even though the above mistake was brought to its notice. Further, on assessee's submission that it had neither received any assessment order under FBT provisions nor received any demand notice or penalty notice, the same was served on it. And if there was any objection, assessee could have filed submissions before the AO. But, even on completion of the penalty proceedings, assessee had chosen not to respond to any of the proceedings under section 115WE or under section 271(1)(d). Therefore, it was a fit case for levy of penalty. Accordingly, penalty under section 271(1)(d) was sustained.

REFERRED : Asstt. CIT v. Vijaya Hirasa Kalamkar (HUF) (1998) 231 ITR 137 (AP) : 1998 TaxPub(DT) 0434 (AP-HC)

FAVOUR : Against the assessee

A.Y. : 2006-07

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