Failure to respond to tax notices due to noncommunication and late efiling activation leads to penalty deletion on reasonable cause.

Penalty for failure to comply with statutory notices was held unsustainable where notices and an exparte assessment under reassessment proceedings were not communicated to the taxpayer; delayed awareness followed activation of an efiling account for Aadhaar linking. The appellate authority condoned delay in filing appeal, set aside the exparte assessment after accepting the taxpayer's explanation of noncommunication, and found that the taxpayer established reasonable cause for noncompliance. Consequentially the penalty under the tax levy for noncompliance with notices was deleted and the taxpayer's appeal was allowed.

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Issues: Whether the penalty levied under section 272A(1)(d) of the Income-tax Act, 1961 is sustainable where the assessee establishes reasonable cause for non-compliance of statutory notices and claims relief under section 273B.

Analysis: The assessee was a non-regular filer whose name appeared in the sale deed as a nominee; the property was owned by her husband who declared the capital gains. Statutory notices were not communicated to the assessee and an ex-parte assessment was framed; delay in filing appeal was condoned and the ex-parte assessment was set aside. Section 273B provides for relief from penalty where reasonable cause for default is established. On the facts-nominee entry, absence of communication of notices, first-time activation of e-filing only after bank request and consequent lack of awareness-the requirements for reasonable cause are met and the statutory exception under section 273B applies; the material does not support sustaining penalty under section 272A(1)(d).

Conclusion: Penalty under section 272A(1)(d) is deleted and the appeal is allowed in favour of the assessee.

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