Non- compliance due to delay in getting notice from the authority, the Allahabad Bench of the Income Tax Appellate Tribunal (ITAT)has held that penalty under section 271(1)(b) is not sustainable.
The appellant was represented by Sh. Praveen Godbole and therespondent were represented by Mr A.K.
The assessee, Amita Rajvedi engaged in the medical profession and was practising as Gynecologist. There was a survey under section 133A conducted on 11.9.2018 at the professional premises of the assessee. During survey operations, some papers and other material were impounded by the survey party.
The Assessing Officer issued show cause notice under section 274 r.w.s. 271(1)(b) of the Income Tax Act and the Assessing Officer passed the penalty orders under section 271(1)(b) on account of default / non-compliance of notice issued under section 142(1) of the Income Tax Act.
It was observed that the Assessing Officer ignored the request of the assessee and issued a show cause notice under section 274 r.w.s. 271(1)(b) on 16.1.2019.The AO issued the show cause notice under section 274 r.w.s. 271(1)(b) without supplying the assessee copies of the impounded material and the assessee could not comply with the notice under section 142(1) of the Income Tax Act.
Further, it was evident from the record that the Assessing Officer finally supplied the copies of the impounded material only on 28.01.2019 whereas the impugned order under section 271(1)(b) was passed on 30.01.2019.
The Tribunal observed that the copies of the seized document were issued just before passing the penalty order and the assessee was having a reasonable cause for non-compliance with the notice under section 142(1) of the Act.
Shri. Vijay Pal Rao, judicial member and Shri. Ramit Kochar, accountant member deleted the penalty levied under section 271(1)(b) for the assessment year 2017-18 and the appeal of the assessee was allowed.
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