Reasonable cause for non compliance not established; statutory penalty under notice compliance provision upheld against the taxpayer.

Penalty for failure to comply with statutory notices was sustained because the taxpayer did not prove a reasonable cause; the post dated medical certificate lacked contemporaneous corroboration and did not cover the notice period, repeated non response during penalty proceedings undermined the claim of incapacity, and conflicting evidence of substantial online gaming receipts and uncorroborated third party operation claims further negated relief. The statutory test requires contemporaneous or convincing evidence to attract relief, which was not met, so the penalty stands.

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Issues: (i) Whether the penalty of Rs. 20,000/- levied under section 272A(1)(d) of the Income-tax Act, 1961 for failure to comply with notices under section 142(1) is sustainable, and whether the assessee established a reasonable cause under section 273B of the Income-tax Act, 1961 for non-compliance.

Analysis: The facts show non-compliance with notices dated 28.08.2023 and 07.02.2024 and continued non-response during penalty proceedings, leading to a penalty of Rs. 10,000/- per default under section 272A(1)(d). The assessee relied on a medical certificate dated 14.09.2024 asserting that his mother required assistance for daily living; however, the certificate post-dates the relevant notice period and no contemporaneous medical evidence was produced for the period of non-compliance. The assessee's assertion of incapacity to respond is further weighed against evidence of substantial online gaming income in the same year and an uncorroborated claim that gaming was conducted by a third party. The statutory test under section 273B requires establishment of reasonable cause for non-compliance by contemporaneous or convincing evidence; in the absence of such evidence and given repeated non-compliance during penalty proceedings, the statutory preconditions for relief under section 273B are not met.

Conclusion: The penalty under section 272A(1)(d) of the Income-tax Act, 1961 is upheld; the assessee failed to establish reasonable cause under section 273B and the penalty of Rs. 20,000/- is sustainable against the assessee.

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