2025 (9) TMI 1491

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....(1)(b)/272A(1)(d): 2. Brief facts pertaining to levy of penalty u/s. 271(1)(b) & 272A(1)(d) of the Act are that there was a search u/s. 132 of the Act conducted at the premise of Dr. Vedamurthy Maya on 01.03.2018, pursuant to which, the AO had initiated action u/s. 153A of the Act against the searched assessee (Dr. Vedamurthy Maya); and against other persons, issued notice u/s. 153C of the Act [i.e. against Dr Maya's husband Shri Vedamurthy and the firm M/s. RSV Skin & Laser Centre]. Pursuant to notice u/s. 153A of the Act dated 26.11.2018, Dr. Vedamurthy Maya filed return on 23.10.2019. Similarly, the other persons filed their return of incomes (RoI) on 12.11.2019 pursuant to notice u/s. 153C of the Act dated 01.10.2019. Thereafter, the AO is noted to have issued statutory notices to the three persons u/s. 143(2) of the Act and inter alia issued notice dated 09.12.2019 u/s. 142(1) of the Act against the captioned three persons calling for certain details. However, according to the AO, notice u/s. 142(1) of the Act didn't elicit any response from the assessee's, which omission on the part of the three assessee's/persons led the AO to initiate penalty u/s. 271(1)(b) of the Act by....

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....t by preparing the application for filing the same before the ITSC, and filed the application before ITSC on 27.12.2019 (i.e. after '18' days). Thus, according to the Ld.AR, the omission on the part of the three (3) assessee's, not to appear before the AO, in the aforesaid facts and circumstances of the case can be seen to be bona fide and in good faith and therefore, the omission to appear/respond to notice on 09.12.2019, can't invite penalty. The assessee's case are that they had reasonable cause for not complying with the notice dated 09.12.2019 and hence, assessee's shouldn't be fastened with penalty. Therefore, the Ld.AR prayed that penalty levied of Rs.10,000/-u/s.271(1)(b) of the Act by order dated 26.06.2024 (i) for AYs 2012-13 to 2016-17 in the case of Dr. Vedamurthy Maya (ii) for AYs 2014-15 to 2016-17 M/s.RSV Skin & Laser Centre and (iii) for AYs 2015-16 to 2016-17 Shri Vedamurthy, be deleted. The Ld.AR also pleaded for deleting the penalty of Rs.10,000/- levied for non-compliance to the notice u/s. 142(1) of the Act dated 09.12.2019 for AYs 2017-18 & 2018-19 u/s. 272A(1)(d) of the Act in the hands of all the three assessee(s) by penalty order dated 26.06.2024. 4. Per....

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....d] 6. According to the Ld.AR, non-compliance to the notice u/s. 142(1) of the Act dated 09.12.2019 was not deliberate because the assessee on the basis of legal opinion was preparing to settle the case by filing application before the ITSC u/s. 245D of the Act and meanwhile, the notice u/s. 142(1) of the Act dated 09.12.2019 was issued by the AO and for non-compliance to the same, the impugned penalties has been imposed. According to the assessee, the assessee acted bonafide on the legal advice and within '18' days of the notice in question had preferred an application before ITSC u/s. 245D(1) of the Act on 27.12.2019 which shows that the assessee had taken a course of action sanctioned by statue. Thus, according to the Ld.AR, the omission on the part of assessee's, not to comply with the notice dated 09.12.2019 can't be viewed as deliberate, rather it was a bona fide action made in good faith. And in any case, there was reasonable cause for the failure to comply with the notice as contemplated u/s. 273B of the Act and hence, penalty u/s. 271(1)(b) of the Act / u/s. 272A(1)(d) of the Act was not warranted. 7. The question to be addressed is whether in the facts & circumstance....

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....se (b) of sub-section (1) of section-271, ........ or clause (d) of sub-section (1) or subsection (2) of section-272A, .................. no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provisions if he proves that there was reasonable cause for the said failure. 9. On examination of relevant facts, it is noted that pursuant to search at Dr.Maya's premises, notice u/s. 153A of the Act was issued and in response, Dr. Maya is noted to have filed ITR/RoI on 23.10.2019 & the other two assessee's were issued notice u/s. 153C of the Act and pursuant to that notice, they filed ITR/RoI on 12.11.2019. Thereafter, the assessee's are noted to have consulted Legal Consultants, who advised them to settle the case by filing application for settlement u/s. 245D of the Act, which they complied by filing application before the ITSC on 27.12.2019. Meanwhile, the AO is noted to have issued notice u/s. 142(1) of the Act dated 09.12.2019, which they didn't complied with. And for failure to comply with the directions given in notice u/s. 142(1) of the Act dated 09.12.2019, the AO has levied penalty of Rs.10,000/- across all the ....