2024 (2) TMI 456 - AT - Income Tax

Tax Tribunal Nullifies Rs. 30,000 Penalty for Non-Compliance Due to Reasonable Cause; Assessee's Appeal Succeeds.

The ITAT, Delhi allowed the appeal of the assessee, setting aside the Rs. 30,000 penalty imposed under section 272(1)(d) of the Income Tax Act for ... Penalty levied u/s 272(1)(d) - non-compliance of notice issued u/s 142(1) - assessee mentioned that due to some internal problems in the organization between October and November, 2019, no reply could be filed during the assessment proceedings and thereafter, once the issue got resolved in the organization, the replies were filed on 09.12.2019 before the AO for completing the assessment proceedings - HELD THAT:- As notice u/s. 272(1)(d) issued for the default in the responding to the notices issued during assessment proceedings u/s. 142(1) dated 23.10.2013 for 30.10.2019, u/s. 142(1) dated 5.11.2019 for 8.11.2019 and u/s. 142(1) dated 20.11.2019 for 22.11.2019, reply to the penalty notice filed on 10.12.2019 Stating that” as no responsible person was available to file thee reply so reply could not be filed”, but the same is not accepted by AO and penalty of Rs. 30000 imposed vide order dated 29.06.2021. As per the provisions of u/s. 273B it can be considered as a reasonable cause. Hence, penalty is hereby obliterated. Decided in favour of assessee. Issues Involved:The appeal against the penalty imposed under section 272(1)(d) of the Income Tax Act for non-compliance with notices issued under section 142(1) of the Act.Issue 1: Penalty ConfirmationThe CIT(A) confirmed the penalty of Rs. 30,000 imposed by the Assessing Officer under section 272(1)(d) of the Income Tax Act for non-compliance with the notice issued under section 142(1) of the Act. The assessee contended that the penalty imposition was wrong and illegal, citing internal organizational problems as the reason for delayed responses during the assessment proceedings. The CIT(A) noted that the assessee failed to respond to various notices issued under section 250 of the Act during the appellate proceedings. Despite the explanation provided by the assessee regarding the delay in responses, no reasonable cause or evidence was furnished for not replying to the statutory notices issued under section 142(1) of the Act. The CIT(A) upheld the penalty, stating that the AO rightly imposed it due to the lack of responses to statutory notices. The grounds of appeal were dismissed by the CIT(A).Issue 2: Appeal DecisionThe ITAT, Delhi observed that the penalty was imposed for the default in responding to notices issued during the assessment proceedings under section 142(1) of the Act. The assessee had cited the unavailability of a responsible person to file the reply as the reason for the delayed response. The ITAT considered this explanation as a reasonable cause under section 273B of the Act. Consequently, the penalty of Rs. 30,000 imposed by the AO was set aside, and the appeal of the assessee was allowed.Final Decision:The ITAT, Delhi allowed the appeal of the assessee, setting aside the penalty of Rs. 30,000 imposed under section 272(1)(d) of the Income Tax Act for non-compliance with notices issued under section 142(1) of the Act. The ITAT considered the unavailability of a responsible person to file the reply as a reasonable cause, leading to the obliteration of the penalty. The order was pronounced in the open court on 06/02/2024.