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2020 (8) TMI 6 - AT - Income TaxLevy of penalty u/s 271(1)(b) - non-compliance to first notice issued u/s 142(1) - reasonable cause for non-compliance in terms of section 273B - HELD THAT:- Information/documents so sought by the AO necessarily have to be provided by the assessee to the authorized representative - There is nothing on record which demonstrate that such documents were either in the possession of the authorized representative at the time of initial hearing and he wanted time to go these documents before submitting to the AO or the assessee has subsequently submitted these documents to the authorized representative to be submitted to the AO which the authorized representative failed to submit before the AO. Though there is non-appearance on part of the authorized representative at the second scheduled date of hearing, at the same time, the possibility of non-availability of the requisite documents as so required by the Assessing officer cannot be ruled out. In absence of these facts and without confronting the authorized representative, we are unable to accede to the contention of the assessee that merely because she has authorized a Chartered accountant, the entire fault lies with the Chartered accountant and assessee cannot be faulted as the non-compliance is by way of non-filing of the information/documents so sought by the Assessing officer and not limited to attending to the proceedings before him. Penalty proceedings were not found acceptable to the Assessing officer, the assessee should have been allowed another opportunity to put worth her contentions on merits of levy of penalty. AO without providing any such opportunity to the assessee, passed the penalty order. Therefore, on this ground itself, where there is lack of opportunity before levy of penalty, the penalty so levied deserved to be set-aside. Further, we find that there is no independent finding recording by the AO while levying the penalty and merely referring to the findings in the assessment order, he has arrived at a conclusion that the assessee has willfully not complied with the notices and not co-operated in finalizing the assessment proceedings. It is a settled position that assessment and penalty proceedings are two separate and distinct proceedings and though reference can be drawn to the findings in the assessment order, the AO has to record independent findings as to why penalty may be levied in the given case which we find lacking in the instant case and penalty so levied therefore cannot be sustained. - Decided in favour of assessee.
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