2017 (9) TMI 519 - AT - Income Tax

Penalty u/s 272(A)(2)(c) - Failure to reply / supply the information sought u/s 133(3) from the Bank - compliance was made after a delay of 498 days from the date prescribed in the notice U/s 133(6) - reasons for delay - Held that - There was inordinate delay in complying the notice. However as noticed that there was only one notice was issued by which the information under different codes were sought. We agree with the conclusion drawn by the Income tax authorities regarding non-compliance of notice and not having a reasonable cause for the non-compliance. However as also noticed that there was only one notice issued therefore the penalty can be levied only for noncompliance of the notice once and penalty cannot be levied for the information sought under different codes by the same notice. Therefore sustain the penalty up to 49, 800/- in all the three appeals and the balance amount is deleted. Appeals of the assessee partly allowed.

Summary

Issues:
Appeals against confirmation of penalty under section 272A(2)(c) of the Income Tax Act, 1961.

Analysis:
1. The appeals were filed by the assessee against the common order of the Ld. CIT(A), Alwar, for the assessment year 2012-13. The common issue in all appeals pertained to the confirmation of penalty under section 272A(2)(c) of the Act.

2. The assessee failed to comply with a notice under section 133(6) of the Act, resulting in a penalty being imposed by the Joint Director of Income Tax (Intelligence & Criminal Investigation), Jaipur for non-compliance of the notice for furnishing information under different codes separately.

3. The Ld. CIT(A) confirmed the penalties levied for all three years, considering the delayed compliance and the reasons provided by the appellant for non-compliance. The appellant's grounds of appeal on this issue were dismissed.

4. In the subsequent appeal before the ITAT, the appellant contended that there was a reasonable cause for the delay in furnishing the required information, citing technical difficulties and the need for software support. The appellant also referred to relevant case law to support their argument.

5. The appellant argued that the penalty imposed was not justified given the circumstances and cited judgments highlighting the discretion to be exercised judiciously in imposing penalties for non-compliance with statutory obligations.

6. The appellant further contended that the notice issued under section 133(6) was general in nature and not within the domain of the assessing officer, thus challenging the justification for the penalty imposed.

7. After considering the arguments from both sides, the ITAT upheld the penalty up to &8377; 49,800 in all three appeals, noting the inordinate delay in compliance but emphasizing that only one notice was issued, and therefore, the penalty could be levied only once for non-compliance of the notice.

8. Consequently, the ITAT partly allowed all three appeals of the assessee, sustaining the penalty up to &8377; 49,800 in each appeal and deleting the balance amount.

This comprehensive analysis outlines the legal proceedings, arguments presented, and the final decision of the ITAT regarding the confirmation of penalties under section 272A(2)(c) of the Income Tax Act, 1961.