2017 (9) TMI 101 - AT - Income Tax

Penalty under Income Tax Act deleted due to infrastructural constraints

The appeals were allowed, and the penalty under Section 272A(2)(c) for delay in providing information under notices Section 133(6) of the Income Tax Act ... Penalty U/s 272A(2)(c) - delay in furnishing information under the various codes asked by issuing notice by the ITO (Intelligence), Kota U/s 133(6) - reason for non-compliance - Held that:- ITO (Intelligence), Kota asked the information from the branch by issuing notice U/s 133(6) of the Act. During this relevant period, there was no permanent posting of Branch Manager in that branch. The branch was not having adequate software to compile such information to be provided in compliance of notice U/s 133(6) of the Act. The facts of the case also suggest that the non-compliance was not willful but it was due to lack of required infrastructure and man power. During the period, such difficulties were being faced by the branches located in the remote areas of Jhalawar district. Therefore, in my considered view, the non-compliance was due to reasons beyond the control of the persons to whom the notices were issued. It was also stated during the hearing that there is no noncompliance of any notice subsequent to these notices. The notices issued subsequently have been complied with in time. Direct to delete the penalty levied U/s 272A(2)(c) of the Act for all the years under appeal. - Decided in favour of assessee. Issues: Appeal against penalty U/s 272A(2)(c) for delay in furnishing information under notice U/s 133(6) of the Income Tax Act, 1961.Analysis:The appeals were filed against the common order of the Ld. CIT(A), Alwar, regarding the penalty U/s 272A(2)(c) for delay in providing information under notices U/s 133(6) of the Act. The main contention was the non-compliance of notices due to the absence of a permanent Branch Manager and lack of necessary software at the branch office located in a remote area. The assessee argued that the delay was not willful but a result of these circumstances. The Ld. Sr. DR supported the penalties imposed by the authorities.During the hearing, it was noted that the branch faced challenges in complying with the notices due to the absence of a permanent Branch Manager and inadequate software for compiling the required information. The non-compliance was deemed not willful but a consequence of infrastructural and manpower limitations faced by branches in remote areas. It was highlighted that there were no subsequent instances of non-compliance after the challenges were addressed. Considering these factors, the penalty U/s 272A(2)(c) was directed to be deleted for all the years under appeal.In conclusion, all three appeals of the assessee were allowed, and the penalty under U/s 272A(2)(c) for delay in furnishing information under notices U/s 133(6) of the Act was deleted based on the reasons beyond the control of the individuals to whom the notices were issued.