TMI Blog2019 (10) TMI 721X X X X Extracts X X X X X X X X Extracts X X X X ..... constitute only one default, hence, the penalty levied by the AO for five defaults is restricted to one default and the balance amount of ₹ 40,000/- is deleted. As regards the other pleas raised by the assessee, it is manifest from the record that the AO has clearly mentioned in the assessment order the default/non-compliance to the notice issued under section 142(1) and further in reply to show cause notice, the assessee has not taken this plea that it has not received the notice issued under section 142(1). As regards the reasonable and bonafide explanation, once the AO has sent the notice five times which means 1st notice and 4 reminders and all of these notices remained non-complied by the assessee, then this plea of bonafide a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lete any grounds of appeal at the time hearing or earlier. 2. The assessee is a company and engaged in the business of tour, travel and foreign exchange. The assessee filed its return of income on 23.09.2013 declaring loss of ₹ 24,24,512/- and unabsorbed depreciation of ₹ 7,42,029/-. The assessment was completed under section 143(3) on 29.01.2016 whereby the AO determined the total income at ₹ 2,69,000/- being the addition made under section 40(a)(ia) of the IT Act. Since there was non-compliance of the notice issued under section 142(1), the AO initiated the proceedings under section 271(1)(b) by issuing show cause notices dated 30.01.2016 and then on 1st July, 2016. The AO passed five separate penalty orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sonable and bonafide explanation under section 273B of the IT Act. Alternatively, the ld. A/R has submitted that the AO has alleged the default of notice issued under section 142(1) five times whereas it is only one notice and will be counted as one default for which the AO has levied five penalties which is not legal and justified. In support of his contention, he has relied upon the decision of Delhi Benches of the Tribunal in case of Smt. Rekha Rani vs. DCIT, 154 ITD 617 (Delhi-Trib.). Thus the ld. A/R has submitted that at the most it can be considered only one default and not five defaults. 4. On the other hand, the ld. D/R has submitted that the AO has given the details of defaults in the assessment order and specifical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these observations of the AO in the assessment order recording the non compliance of notice is as under :- Due to change of incumbent, notices u/s 142(1) issued alongwith detailed query letter issued to the assessee on 07.08.2015, 07.09.2015, 09.10.2015, 26.10.2015 and 09.11.2015 fixing date for hearing on 04.09.2015, 07.10.2015, 23.10.2015, 06.11.2015 and 20.11.2015 respectively None attended. Thus it is clear that the AO issued first notice under section 142(1) on 07.08.2015 along with detailed query letter and when there was non-compliance, he has issued the same notice on the subsequent dates as mentioned and hence the subsequent four notices issued by the AO are nothing but reminders of the first notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n case of failure of the assessee to comply with the notice under Section 143(2) of the Act, the remedy with the Assessing Officer lies with framing of best judgement assessment under the provisions of Section 144 of the Act and not to impose penalty under Section 271(1)(b) of the Act again and again. In this view of the matter, we restrict the penalty levied under Section 271(1)(b) of the Act to the first default of the assessee in not complying with the notice under Section 143(2) of the Act. Accordingly, the penalty imposed is restricted to ₹ 10,000/- as against ₹ 50,000/- confirmed by the learned CIT(A). The grounds of appeal of the assessee are thus partly allowed. In view of the above facts and circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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