Penalty for non-compliance with assessment notices deleted where partial compliance and limited understanding showed no deliberate default.

Penalty for non-compliance with statutory assessment notices was not sustained where the assessee gave written replies, later complied during assessment and appeal, and the lapse amounted to partial or insufficient compliance rather than total disregard. The Tribunal noted that the assessee was a small-time fruit vendor with limited means and little legal sophistication, and treated the default as not deliberate or wanton. On that basis, the penalty under section 272A(1)(d) was deleted and relief was granted to 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 proceedings.

Analysis: The assessee had not complied fully with the statutory notices, but the record showed written responses and later compliance during the assessment and appellate stages. The default was treated as a case of insufficient compliance rather than total disregard of the notices. The assessee was found to be a small-time fruit vendor with limited means and lack of legal sophistication, and the circumstances did not justify treating the lapse as a deliberate or wanton failure warranting penalty.

Conclusion: The penalty under section 272A(1)(d) of the Income-tax Act, 1961 was deleted and the appeal was allowed in favour of the assessee.

Ratio Decidendi: Where there is no total non-compliance and the default is attributable to limited understanding and partial compliance, penalty for failure to comply with statutory notices should not be sustained.

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