Reasonable cause under section 273B: bona fide non deliberate failure and prompt remedial steps led to penalty deletion.

Reasonable cause under section 273B was found where the assessee showed bona fide, non deliberate failure to comply with a single notice under section 142(1): notices were sent to auditor-controlled e mail addresses, there were documented personnel and office changes, a high notice volume from multiple trusts, and prompt remedial steps once aware. The Tribunal applied a liberal construction of reasonable cause to advance substantial justice, found no mala fides or advantage derived from non compliance, and directed deletion of the penalty imposed under section 272A(1)(d).

---

---

Issues: Whether the assessee established reasonable cause within the meaning of section 273B of the Income-tax Act, 1961 for non-compliance with notice under section 142(1) so as to warrant deletion of penalty levied under section 272A(1)(d) of the Income-tax Act, 1961.

Analysis: The penalty was imposed for an alleged single instance of non-compliance with a notice under section 142(1). The material on record shows notices were issued via the e-filing portal and to email IDs recorded by the auditor that were not within the assessee's control. There were documented changes in key personnel handling taxation, a change of office premises, a large volume of trusts managed by the trustee with many notices received, and prompt steps by the assessee to consult auditors and file submissions once aware. The Assessing Officer imposed penalty only for one instance and at the minimum prescribed amount. Section 273B provides that no penalty shall be imposed if reasonable cause is shown; this expression is to be liberally construed to advance substantial justice and not to punish venial or technical breaches. The facts demonstrate a bona fide, non-deliberate failure without evidence of mala fides or advantage derived from non-compliance, and the penalty proceedings were ancillary to the substantive assessment.

Conclusion: The assessee has demonstrated reasonable cause within the meaning of section 273B and the penalty of Rs. 10,000 imposed under section 272A(1)(d) is deleted; the appeal is allowed in favour of the assessee.

---