2023 (7) TMI 992 - AT - Income Tax

Penalty u/s 272A(1)(d) - non-compliance of the statutory notices - HELD THAT - It is seen from the record that in response to the penalty notice the assessee had filed certain explanation before the Assessing Authority. However, the Assessing Authority did not consider the same. Penalty u/s 271A(1)(d) is not automatic. If the assessee could show the reasonable cause for non-compliance, in that event the AO should not levy the penalty. It is the contention of the assessee that AO through National Faceless Assessment Centre had issued notice dated 14.03.2018 and 23.08.2019 but the same were not received by the assessee. AO has not assigned any reason for not accepting the contention of the assessee. Therefore, it is not a fit case for levy of penalty. Decided in favour of assessee.

Summary

Issues involved:
The issues involved in this case are the imposition of penalty u/s 272A(1)(d) of the Income-tax Act, 1961 for non-compliance of statutory notices and the grounds of appeal raised by the assessee challenging the penalty order.

Imposition of Penalty:
The assessment order was completed u/s 144 of the Income-tax Act, 1961, where a penalty of Rs. 20,000 was imposed on the assessee for non-compliance of notices dated 14.03.2018 and 23.08.2018. The assessee appealed before the CIT(A) against the penalty order, which was dismissed, leading to the appeal before the Tribunal.

Assessee's Submissions:
Despite the absence of the assessee during the proceedings, written submissions were made stating that the penalty proceedings u/s 272A(1)(d) were initiated for failure to comply with notice u/s 142(1). The assessee contended that the notices were not received and all replies to the questionnaire were submitted. The assessee argued that the penalty was imposed without plausible reasons and was against the principles of natural justice.

Tribunal Decision:
The Tribunal considered the submissions and previous quantum proceedings where additions were deleted. The Tribunal noted that penalty for non-compliance of notices is not automatic and can be avoided if reasonable cause is shown. As the notices were not received by the assessee and no reasons were given for rejecting the contentions, the Tribunal held that it was not a fit case for penalty and directed the AO to delete the penalty. Consequently, the appeal of the assessee was allowed.