Reasonable cause defeats penalty for non-compliance when notices were sent to an old address and default was not wilful.

Penalty under Section 272A(1)(d) of the Income-tax Act was not justified where notice compliance failures arose from reasonable cause rather than wilful default. The notices were served at the assessee's old address, and the assessee was no longer posted there; the assessee also did not effectively participate in the online proceedings. On these facts, the non-compliance was treated as being beyond the assessee's control, so the statutory conditions for penalty were not satisfied. The penalty was therefore deleted in favour of the assessee.

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Issues: Whether penalty under Section 272A(1)(d) of the Income-tax Act, 1961 was leviable for non-compliance with notices issued during assessment under Section 144 of the Income-tax Act, 1961, and whether the assessee had shown reasonable cause for the default.

Analysis: The notices were found to have been served at the assessee's old address, and the assessee was no longer posted there. The assessee also did not effectively participate in the online proceedings. On these facts, the non-compliance was treated as arising from circumstances beyond the assessee's control. Since penalty under Section 272A(1)(d) is attracted only where the default is without reasonable cause and carries the element of wilful default, the facts did not justify sustaining the penalty.

Conclusion: The penalty was deleted and the issue was decided in favour of the assessee.

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