Naga Malleswari Mannava Vs ITO (ITAT Visakhapatnam)
ITAT Holds Section 271(1)(b) Proceedings Independent of Section 148 Reassessment Challenge; No Relief From Penalty Without Proving Reasonable Cause for Non-Compliance
Summary: The ITAT Visakhapatnam partly allowed the assessee’s appeal against penalty levied under Section 271(1)(b) of the Income Tax Act for non-compliance with notices issued under Section 142(1). The Assessing Officer had imposed a penalty of Rs.30,000 after treating non-compliance with three separate notices as three independent defaults. The CIT(A) confirmed the penalty. Before the Tribunal, the assessee argued that the notice issued under Section 148 for AY 2015-16 was barred by limitation under Section 149(1), rendering the assessment and consequential penalty proceedings invalid. However, the Tribunal held that proceedings relating to penalty under Section 271(1)(b) were independent of reassessment proceedings under Section 148. The Tribunal also noted that the assessee had neither disputed the non-compliance with notices nor established any reasonable cause under Section 273B. Nevertheless, taking a lenient view, the Tribunal treated the three instances of non-compliance as a single default and reduced the penalty from Rs.30,000 to Rs.10,000, granting relief of Rs.20,000 to the assessee.
Ground of Appeal: Whether penalty under section 271(1)(b) for non-compliance with notices issued under section 142(1) can be challenged on the ground that the notice under section 148 is allegedly time-barred, and whether multiple failures to comply with notices can be treated as a single default for penalty purposes.
