Sumit Maheshwari Vs ITO (ITAT Delhi)
In the case of Sumit Maheshwari vs. Income Tax Officer (ITAT Delhi), the appeal arose from a penalty imposed under section 271(1)(b) of the Income Tax Act, 1961 for non-compliance with a notice issued under section 142(1) of the Act. The core issue was whether the penalty was justified given the circumstances surrounding the service of notices by the Income Tax Department.
Background and Arguments:
The assessee, Sumit Maheshwari, challenged the penalty levied on the grounds that notices, including the notice under section 142(1) and subsequent proceedings, were sent to his old address at 31, Chanakyapuri, Meerut. However, the assessee had long since shifted to a new address at 94-95, Chanakyapuri, Meerut, and had duly informed the Income Tax Department by filing his income tax returns for both the assessment years 2011-12 and 2012-13 with the updated address.
Despite the change in address being on record through these filings, the notices were consistently sent to the old address. Consequently, the assessee contended that since the notices were not received due to the incorrect address being used by the department, the penalty under section 271(1)(b) was not justified.
Proceedings and Findings:
- Assessment and Penalty Imposition: The Assessing Officer completed the assessment under sections 144/147 of the Act on 12.12.2019. Subsequently, a penalty under section 271(1)(b) was imposed for non-compliance with the notice under section 142(1) issued on 31.07.2019.
- Arguments Before ITAT: During the appeal before the Income Tax Appellate Tribunal (ITAT), the assessee reiterated that despite having provided the new address, all notices were sent to the old address, thereby not giving the assessee an opportunity to respond or comply.
- ITAT’s Decision: The ITAT examined the facts and observed that while the penalty order was passed on the new address of the assessee (94-95, Chanakyapuri, Meerut), there was no conclusive finding either by the Assessing Officer or the CIT(A) regarding the service of the notice under section 142(1) of the Act.Crucially, the ITAT noted that the burden to prove service of notice lies with the Income Tax Department. Since there was no evidence to indicate that the notice dated 31.07.2019 was served on the assessee at either the old or the new address, the ITAT concluded that it cannot be presumed that the assessee deliberately avoided compliance.
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