Tax Tribunal grants immunity and deletes penalty for non-compliance due to advocate's error.

The ITAT Delhi granted immunity under section 273B of the Income-tax Act, 1961, and directed the AO to delete the penalty imposed under section 272A(1)(d) on an individual in the confectionary business for non-compliance with notices due to reliance on an advocate who misled them by filing an inaccurate return. The Tribunal considered the appellant's genuine reasons for non-compliance, especially in the context of the transition to electronic proceedings, and found that they were prevented from sufficient cause. The appellant's appeal was allowed, and the penalty was deleted.

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Issues involved:
The judgment involves the issue of confirming the levy of penalty under section 272A(1)(d) of the Income-tax Act, 1961.

Summary:
The case pertains to an individual engaged in a confectionary business who had deposited significant amounts of cash in bank accounts during demonetization. The Income-tax Officer (AO) completed the assessment under section 144 of the Act and imposed a penalty under section 272A(1)(d) for non-compliance with notices. The appellant argued that they were not properly informed about the assessment proceedings conducted electronically and that their advocate had failed to communicate the notices issued by the AO. The Commissioner of Income Tax (Appeals) upheld the penalty, noting the appellant's continuous absence in the proceedings. However, the ITAT Delhi found that the appellant's inability to respond to the notices was reasonable due to reliance on the advocate, who had misled them by filing an inaccurate return. Considering the unique circumstances and the appellant's genuine reasons for non-compliance, the ITAT Delhi granted immunity under section 273B of the Act and directed the AO to delete the penalty.

The Tribunal observed that the appellant had not attended any proceedings before the AO but had denied receiving statutory notices in electronic mode. The appellant had entrusted their income tax affairs to an advocate who failed to inform them about the notices and misled them by filing an inaccurate return. The Tribunal considered the appellant's reasons for non-compliance as genuine and reasonable, especially in the first year of electronic proceedings. Citing a precedent from the Mumbai Tribunal, the ITAT Delhi held that the appellant was prevented from sufficient cause and entitled to immunity under section 273B of the Act. Consequently, the penalty under section 272A(1)(d) was directed to be deleted.

In conclusion, the ITAT Delhi allowed the appeal of the assessee, finding that the reasons for non-compliance with notices were valid and that the penalty levied under section 272A(1)(d) should be deleted.

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