2024 (6) TMI 1025 - AT - Income Tax

Tribunal Deletes Unwarranted Tax Penalty After Appellant's Compliance with Notice and Reasonable Cause Found for Delay.

The ITAT concluded that the penalty imposed under section 272A(1)(d) of the Income Tax Act, 1961, was unwarranted as the appellant eventually complied ... Levy of penalty u/s. 272A(1)(d) - non compliance of notice u/s. 142(1) - HELD THAT:- It is an undisputed fact that subsequently the assessee has complied with the notice issued by the AO and had furnished necessary documents. The reason given by the assessee for delay in responding to the notice dated 22.07.2019 seems plausible. There appears to be reasonable cause for the said failure. AO after examining the details and documents furnished by the assessee accepted the returned income for the impugned assessment year. We are of considered view that penalty levied u/s. 272A(1)(d) of the Act is liable to be deleted. Appeal of the assessee is allowed. Issues Involved:The appeal against the order confirming the penalty under section 272A(1)(d) of the Income Tax Act, 1961 for Assessment Year 2017-18.Summary:The appellant, represented by Shri Pratap Gupta, challenged the penalty imposed by the Assessing Officer (AO) for non-compliance of a notice dated 22.07.2019. The appellant had initially filed the return of income on 28.10.2017, declaring income of Rs. 18,74,970. The AO accepted the returned income after examining the details and documents furnished by the assessee. The appellant argued that the penalty was unjustified as they had provided a detailed explanation for the delay in responding to the notice. The appellant cited a precedent to support their case, emphasizing that subsequent compliance was considered good compliance and earlier defaults were overlooked by the AO.In response, Shri S.L. Verma representing the Department contended that the AO had given multiple opportunities to the assessee to submit necessary documents. The penalty was imposed for non-compliance with the notice issued under section 142(1) of the Act. It was highlighted that the penalty order was issued before the assessment order, and therefore, no separate satisfaction was required for the penalty in the assessment order.After considering the arguments from both sides and reviewing the lower authorities' orders, the Appellate Tribunal found that the appellant had eventually complied with the notice and provided the required documents. The delay in responding to the notice was deemed justified, and there was a reasonable cause for the initial failure to comply. Given these circumstances, the Tribunal concluded that the penalty imposed under section 272A(1)(d) was unwarranted and ordered its deletion. Consequently, the impugned order was set aside, and the appeal of the assessee was allowed.