INCOME TAX ACT, 1961

Section 271(1)(b)

Penalty under section 271(1)(b) - AO issued a notice under section 142(1) - In spite of adjournments given, no return of income was filed -

Notice under section 142(1) was sent to the assessee asking him to file true and correct return of his income or to produce its Income-tax return. AO issued a notice under section 142(1) questionnaire and show cause notice under section 271(1)(b) for the assessment year 2006-07 and was served on assessee. Assessee was asked to give reply. A fax was received from the assessee denying the service of notice and intimating AO to send all notices / summons and other documents. Assessee appeared for hearing and produced Power of Attorney. AO was of the view that various opportunities were given by him to the assessee for filing his return of income, but in spite of the same and show cause notices, return was not filed, therefore, penalty under section 271(1)(b) was imposed for failing to file the return of income. Held: Assessee had given his reply that he had not received the earlier notices and given the new address of his Advocate and he further sent a letter and argued that having not received the earlier notices under section 142(1) and there could not be any proceedings pending before AO, meaning thereby, assessee was having the knowledge of all the notices which were already served upon assessee and he was watching the proceedings through his counsel. Assessee appeared before AO and filed his Power of Attorney and requested for various adjournments which were granted by AO, but in spite of various adjournments given by AO to assessee, no return of income was filed by assessee. Therefore, AO rightly imposed the penalty.

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2006-07

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