Penalty for non-compliance with scrutiny notices fails when details are later furnished and assessment is completed without additions.

Penalty for alleged non-compliance with section 142(1) notices was held unsustainable where the assessee sought adjournment, later furnished the required details, and the Assessing Officer accepted them while completing assessment under section 143(3) at the returned income without any addition or disallowance. As the assessment was not framed under the best judgment procedure in section 144, the record did not justify levy of penalty under section 272A(1)(d). The penalty was therefore quashed in favour of the assessee.

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Issues: Whether penalty under section 272A(1)(d) of the Income-tax Act, 1961 could be sustained for alleged non-compliance with notices under section 142(1) when the assessee sought adjournment, later furnished the required details, and the assessment was completed under section 143(3) without any addition.

Analysis: The record showed that notices under section 142(1) were issued during scrutiny assessment and, in respect of certain notices, the assessee sought adjournment on the ground that the information was under compilation. The required particulars were subsequently furnished and accepted by the Assessing Officer, who completed the assessment under section 143(3) at the returned income without any addition or disallowance. In these circumstances, the assessment was not framed under the best judgment procedure under section 144, and the record did not support treating the matter as one warranting penalty for non-compliance.

Conclusion: The penalty under section 272A(1)(d) was not sustainable and was quashed in favour of the assessee.

Ratio Decidendi: Where the assessee ultimately furnishes the information sought under section 142(1) and the assessment is completed under section 143(3) without resort to section 144, penalty for alleged non-compliance with the notice is not warranted.

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