INCOME TAX ACT, 1961

Section 271(1)(b)

Penalty under section 271(1)(b) - Non-compliance of notice - Leviability - Assessee cooperated in assessment proceedings after attending proceedings on subsequent dates and based on such compliances, assessment was completed

Search and seizure operation was conducted at premises of assessee and a notice under section 153A was issued. Assessee filed return in response to the said notice. Further, a notice under section 142(1) was issued fixing the date of hearing. However, the assessee did not appear before the AO on the scheduled date of hearing. Later on, the assessee filed reply to the said notice. Further, a show-cause notice was issued requiring the assessee to explain the nature of possession and source of jewellery and silver articles found from her premises and to reconcile the same with her declared income/assets with documentary evidences and detailed reply was filed by the assessee. Accordingly, the proceedings were completed under section 153A read with section 143(3). AO levied penalty under section 271(1)(b) for non-appearance of the assessee on the scheduled date of hearing. Held: Assessee after failing to appear on the initial date of hearing subsequently complied with the notice issued under section 142(1) on subsequent dates as noted by the AO in the assessment order itself. Further, based on such compliances, the assessment was completed under section 153A read with section 143(3). Further, the assessment order was not framed ex parte and hence, the penalty levied under section 271(1)(b) for non-appearance of the assessee on the scheduled date of hearing, would not be sustainable.

REFERRED : M/s. Regent Beers and Wines Ltd. v. Dy. CIT [ITA Nos. 350 & 351/Ind/2018 Order, dated 16-5-2019] : 2019 TaxPub(DT) 3945 (Ind-Trib) Rambhau Ghanshyam Asai (HUF) v. ITO [ITA No. 798/Ind/2016 to 804/Ind/2016 Order, dated 16-5-2018] : 2018 TaxPub(DT) 2692 (Ind-Trib)

FAVOUR : In assessee's favour

A.Y. : 2010-11 to 2016-17

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