TaxTMI 
TaxTMI 
2026 (8) TMI 560
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....e appeal filed by the assessee against the penalty order dated 27.09.2022 passed u/s. 271(1)(b) of the Income Tax Act, 1961 (hereinafter referred to as the "Act"), pertaining to Assessment Year (A.Y.) 2013-14. 2. The brief facts of the case are that the assessee is a trust and for the year under reference 2013-14, the assessee did not file any return of income. As per the information available with the department, the case of the assessee was reopened to verify the cash deposit of Rs. 2.44 crores made in its bank account and accordingly the notice u/s. 148 of the Act was issued on 31.03.2021. In response to the notice the assessee did not file any return of income. Further, the statutory notices u/s. 142(1) of the Act were issued and no ....
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....u/s. 142(1) of the Act. In response to notice issued by the ld.CIT(A), the assessee filed a written submission explaining the merits of the quantum assessment. However, the ld.CIT(A) was not convinced with the submissions of the assessee and stated that the assessee did not provide any cogent reason as to the reason behind their non-compliance to prove the sufficient cause. In view of the same, the ld.CIT(A) passed the order u/s. 250 of the Act upholding the penalty imposed on the assessee. 5. Aggrieved by the order of the ld.CIT(A), the assessee is in appeal before us. 6. The ld.AR for assessee argued before us, that the assessee is a trust, engaged in running education institution of law university and was severely affected by the p....
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....2(1) of the Act, alleged to have been violated by the assessee, were issued on 25.08.2021, 29.11.2021 and 20.01.2022, during the period when the country was witnessing unprecedented disruption on account of the COVID-19 pandemic. The assessee is an educational trust engaged in running a law university and has consistently pleaded that owing to the severe disruption caused by the pandemic, the notices could not be effectively attended to. The Revenue has not brought any material on record to demonstrate that the explanation offered by the assessee is inherently false or lacks bona fides. In our considered opinion, the extraordinary circumstances prevailing during the relevant period cannot be ignored while examining the existence of "reasona....
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....nd supported by surrounding circumstances, the benefit of doubt should ordinarily go in favour of the assessee. 12. We further note that the assessee had, albeit belatedly, participated in the assessment proceedings by filing a reply in response to the draft assessment order. Though the explanation furnished was not accepted by the AO, the subsequent participation of the assessee indicates that there was no absolute or contumacious disregard of the statutory proceedings. The object of section 271(1)(b) is to ensure effective compliance with statutory notices and not to punish every technical or venial default irrespective of the surrounding circumstances. In the present case, considering the unprecedented pandemic situation, the nature o....