Appeal allowed for penalty under IT Act due to digital transition delay.

The Tribunal allowed the appeal, ruling that the penalty imposed under section 272A(1)(d) of the IT Act for non-compliance with a notice under section 142(1) was unjustified. The Tribunal found that the delay in compliance was due to transitioning to digital communication methods and that the assessee eventually responded before the assessment and penalty orders were issued. Therefore, the penalty was deemed unwarranted, and it was deleted. The decision was pronounced in open court on 13th September 2022 at Allahabad.

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Issues involved:
Penalty imposed under section 272A(1)(d) of the IT Act for non-compliance with notice under section 142(1) - Compliance with notice - Justification of penalty - Bonafide reasons for delay in compliance.

Analysis:
1. The appeal was against the penalty order passed under section 272A(1)(d) of the IT Act for the assessment year 2017-18 due to alleged non-compliance with a notice under section 142(1). The assessee contended that the penalty was unjustified both factually and legally.

2. The Assessing Officer initiated penalty proceedings as the assessee allegedly did not comply with the notice under section 142(1) dated 18th November, 2019. The penalty of Rs. 10,000 was imposed on 10th January, 2022, after the assessment was framed under section 143(3) on 28th December, 2019.

3. The CIT(A) upheld the penalty, leading the assessee to appeal before the Tribunal. The Tribunal heard arguments from both sides, where the assessee claimed to have complied with the notice and provided necessary details during the assessment proceedings.

4. The assessee argued that compliance was made, albeit belatedly, and all required information was submitted. The Assessing Officer did not record any satisfaction for initiating penalty proceedings. The assessee cited a relevant Tribunal decision to support the argument that the penalty was unwarranted.

5. On the contrary, the Department argued that despite filing a reply to the notice, it was done after the prescribed deadline, indicating non-compliance. The Department relied on the lower authorities' orders to support its stance.

6. The Tribunal examined the facts and submissions. It noted the sequence of events leading to the penalty imposition and the compliance by the assessee. The Tribunal observed that the assessee eventually responded to the notice, even though it was delayed. The Tribunal emphasized that the compliance was made before the assessment and penalty orders were issued.

7. Considering the circumstances, the Tribunal found that the delay in compliance was due to the transition to digital communication methods. The Tribunal concluded that the assessee's actions did not amount to non-compliance, especially given the change in the assessment process. Consequently, the penalty imposed under section 272A(1)(d) was deemed unjustified and was deleted.

8. As a result, the Tribunal allowed the appeal of the assessee, emphasizing that the compliance was eventually made, and the penalty was not warranted under the given circumstances. The order was pronounced in open court on 13th September 2022 at Allahabad.

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