2015 (4) TMI 1194 - AT - Income Tax

Penalty u/s 272A(2)(c) - reasonable cause for the delay on the part of the assessee to furnish the required information in response to the notices issued u/s 133(6) - intentional or willful delays - Held that - The assessee has submitted that the sufficient cause pleaded by the assessee before the Ld. CIT(A) for the delay resulted in furnishing the required information in response to the notice issued under section 133(6) is supported by the correspondence and e-mails exchanged between the two assessee s which are the branches of the State Bank of India with their Head Office/Regional Office. As contended that proper and sufficient opportunity however was not given to the assessee s either by the A.O. or by the Ld. CIT(A) to produce the said evidence and urged that one more opportunity may therefore, be given to the assessee s to support and substantiate its case of sufficient cause pleaded before the Ld. CIT(A) by producing the relevant evidence. Since the learned D.R. has also not raised any serious objection in this regard, we restore the matter to the file of the A.O. for the limited purpose of giving one more opportunity to the assessee to support and substantiate their case of sufficient case for the delay as pleaded before the Ld. CIT(A) by producing the relevant documentary evidence in the form of correspondence and e-mails exchanged with their Head Office/Regional Office. Appeals of the assessee are treated as allowed for statistical purposes.

Summary

Issues:
Penalty under section 272A(2)(c) for non-compliance with notices under section 133(6) of the Income Tax Act.

Analysis:
The judgment involves two appeals by different branches of State Bank of India against penalties imposed by the Assessing Officer (A.O.) under section 272A(2)(c) for non-compliance with notices under section 133(6) of the Act. The penalties were confirmed by the Commissioner of Income Tax (Appeals) [CIT(A)], albeit with different outcomes for each branch.

In the case of NTPC Branch, the CIT(A) restricted the penalty from Rs. 1,05,300 to Rs. 35,100. The CIT(A) considered factors like willfulness, deliberate avoidance, and circumstances beyond control. Despite the delayed compliance, the penalty was reduced due to the submission of information albeit late, and the absence of willful non-compliance.

Conversely, in the case of Metpalle Branch, the CIT(A) upheld the full penalty of Rs. 1,05,300 imposed by the A.O. The assessees challenged these decisions before the Income Tax Appellate Tribunal (ITAT).

During the appellate proceedings, the assessees argued that the delay in furnishing information was due to the need for software support and permission from the Head Office/Regional Office. They contended that the delay was not intentional and penalties were unjustified. The CIT(A) considered these submissions along with the material on record before making the decisions.

The ITAT, after hearing arguments from both sides, found merit in the assessees' contentions. It observed that the assessees were not given sufficient opportunity to produce evidence supporting their case of reasonable cause for the delay. Consequently, the matter was remanded to the A.O. to allow the assessees to provide relevant documentary evidence, such as correspondence and emails with the Head Office/Regional Office, to substantiate their claims.

Ultimately, the ITAT allowed the appeals of the assessees for statistical purposes, indicating a favorable outcome for the assessees in terms of the penalty imposed. The judgment emphasizes the importance of considering reasonable causes for non-compliance and providing adequate opportunities for assessees to present supporting evidence in such cases.