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2021 (3) TMI 160 - ITAT JAIPURPenalty U/s 271(1)(b) - non-appearance of the assessee before the A.O. - non service of notice to assessee - as argued no notices either u/s 143(2) or 142(1) of the Act were ever served upon the assessee - HELD THAT:- Assessee at that relevant time was posted at Jaipur and since all the notices issued by the Revenue were served at Pali and Kakari but were never personally served upon the assessee as at that particular time, the assessee was posted at Jaipur, therefore, service of notices could not be taken effect upon the assessee and because of this reason, the said notices U/s 143(2) and 142(1) of the Act could not be complied with by the assessee. Revenue has not been able to demonstrate before us that even a single notice was ever served upon the assessee. However, even as per the order of the A.O., notice was served either upon one Shri Rajesh Davera or upon one Shri Raghverder but no notice was served upon the assessee and the order of penalty passed u/s 271(1)(b) of the Act even do not mention the relation of said alleged Shri Rajesh Davera and Shri Raghverder with the assessee - non-receipt of notice by the assessee was the reasons for non-compliance of notices which according to us is a “reasonable cause”, therefore, in our view, penalty u/s 271(1)(b) of the Act could not be imposed. Thus non-appearance of the assessee before the A.O. or non-compliance of the notices issued was only because of ‘non-receipt of the notices’ by the assessee and therefore, in our considered view, the same was a “reasonable cause” as has also been held in the case of Woodward Governor India P Ltd. Vs CIT ([2001 (4) TMI 34 - DELHI HIGH COURT]wherein it was held that levy of penalty is not automatic and the absence of a ‘reasonable cause’ is necessary. As only source of income of the assessee is from salary from Government of Rajasthan on which TDS has all ready been deducted and apart from this there is no other source of income of the assessee. Hence, there could not be any intention upon the assessee for skipping the service of notices. It was proved that there was ‘reasonable cause’ for the assessee in failure to comply with the provisions of Section 271(1)(b) of the Act as the ‘non-appearance’ of the assessee before the A.O. was only because of the ‘non-receipts’ of the notices. - Decided in favour of assessee.
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