This document provides a detailed analysis of the Income Tax Appellate Tribunal’s final decision on the case between Jatinder Kumar Ahuja, Bahrain and DCIT, International Taxation Circle, Gurgaon, concerning the assessment year 2012-13. The case number is ITA 2608/DEL/2022, presided over by Judicial Member Ms. Astha Chandra and Hon’ble President Shri G.S. Pannu.
The appeal filed by the assessee, Jatinder Kumar Ahuja, was directed against the order dated 21.09.2022 of the CIT(A) – 43, New Delhi, confirming the penalty of Rs. 10,000 levied by the AO under section 271(1)(b) of the Income Tax Act, 1961 (the “Act”) for the assessment year 2012-13. The case was filed on 2022-10-27, and the final order was pronounced on 2023-05-26. The primary issue in this case was the penalty imposed for failure to comply with the notice under section 142(1) of the Act.
During the hearing on 01.05.2023, the Revenue was represented by Shri Sanjay Kumar, Sr. DR, and the assessee was represented by Shri Sameer Kapoor, CA. The Tribunal proceeded to adjudicate the appeal based on the materials on record and submissions made by both parties.
The appeal was based on the grounds that the assessee, being a non-resident employed abroad, was hardly in India and the address available with the AO was outdated. The assessee claimed he did not receive the notices sent manually by the AO and was thus prevented from complying due to circumstances beyond his control. The assessee requested the penalty be deleted.
The Tribunal noted that the AO initiated the penalty proceedings due to non-compliance with the notice under section 142(1) dated 05.12.2019. Despite multiple opportunities, the assessee did not respond, leading to the imposition of the penalty. The CIT(A) confirmed this penalty despite the assessee’s explanation that he was non-resident and the address on record was outdated.
The Tribunal observed that the assessee provided email correspondence showing he had responded to the notice. This indicated cooperation with the Department contrary to the penalty imposed. The Tribunal concluded that the case did not warrant the imposition of the penalty under section 271(1)(b) and canceled the penalty.
The Tribunal concluded that the assessee was not provided with due opportunity to present his case due to being a non-resident and the outdated address on record. The penalty imposed was deemed unjustified. The order stated:
Order pronounced in the open court on 26th May, 2023.
(G.S. PANNU)
HON’BLE PRESIDENT
(ASTHA CHANDRA)
JUDICIAL MEMBER
This case highlights the importance of considering the specific circumstances of non-resident assessees and ensuring that penalties are imposed only when justified. The decision underscores the need for the authorities to provide adequate opportunities for the assessee to comply with notices and present their case.
The appellant, Jatinder Kumar Ahuja, challenged the penalty imposed by the AO for non-compliance with a notice under section 142(1). The penalty was confirmed by the CIT(A) despite the appellant’s claims of non-receipt of notices due to being a non-resident with an outdated address on record. The Tribunal found in favor of the appellant, canceling the penalty.
The appellant argued that being a non-resident, he was not in India to receive the notices, and the address on record was outdated. The appellant provided evidence of email correspondence with the Department, indicating compliance efforts.
The Tribunal observed that the assessee had made efforts to comply with the notice via email, which contradicted the claim of non-cooperation. The penalty under section 271(1)(b) was deemed unwarranted.
The Tribunal’s decision in the case of Jatinder Kumar Ahuja, Bahrain vs DCIT, International Taxation Circle, Gurgaon, reaffirms the necessity of considering the unique circumstances of non-resident assessees and ensuring fair opportunities for compliance. The cancellation of the penalty highlights the importance of just and reasonable application of tax laws.
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