2024 (7) TMI 786 - AT - Income Tax

Penalty u/s 272A(2)(c) - assessee has failed to discharge the obligation prescribed u/s 133(6) of the Act by furnishing the requisite information before the prescribed authority - HELD THAT - As per provisions of section 273B of the Act, no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in section 272A of the Act and if he proves that there was reasonable cause for the said failure. In the present case, the assessee has asserted before us that the requisite information could not be furnished before the ITO for the reason that the same had wrongly been furnished before the Assistant Inspector General (Registration), Khushinagar. The explanation of the assessee is found to be bona-fide. Accordingly, we order deletion of penalty levied u/s 272A(2)(c) - Decided in favour of assessee.

Issues:
1. Sustaining penalty order
2. Reasonable cause for not furnishing requisite information
3. Exercise of power by income tax authority without prior approval
4. Loss of revenue due to failure to furnish information
5. Information already filed by appellant

Analysis:
1. The appeal was filed against the order of the ld. CIT(A) for the assessment year 2013-14, challenging the penalty order. The appellant contended that there was a reasonable cause for not furnishing the requisite information under section 133(6) of the Income Tax Act, 1961. The penalty was imposed under section 272A(2)(c) of the Act. The appellant argued that the ld. CIT(A) erred in sustaining the penalty order.

2. The appellant raised the issue of reasonable cause for not furnishing the information as required under section 133(6) of the Act. The appellant claimed that the information was mistakenly furnished to a different authority, which was unintentional. The Tribunal considered the explanation provided by the appellant as bona fide and found that there was a valid reason for not submitting the information to the Income Tax Officer (ITO). As per section 273B of the Act, if reasonable cause is proven for the failure to furnish information, no penalty shall be imposed. The Tribunal concluded that the penalty was not justifiable and ordered its deletion.

3. The appellant argued that the power to inquire in a case where no proceedings are pending should not be exercised without the prior approval of designated income tax authorities. The Tribunal did not specifically address this argument in the judgment, as the focus was primarily on the issue of penalty imposition and reasonable cause for failure to furnish information.

4. The appellant contended that there was a loss of revenue due to the failure to furnish information as per notice under section 133(6) of the Act. However, the Tribunal did not find this argument persuasive in the context of the penalty imposition and the reasons provided by the appellant for not submitting the required information.

5. The appellant also highlighted that the information that was available had been filed by the appellant initially. The Tribunal acknowledged this submission but primarily focused on the unintentional error in furnishing the information to a different authority as the main reason for not complying with the requirements under section 133(6) of the Act.

In conclusion, the Tribunal allowed the appeal of the assessee, ordering the deletion of the penalty imposed under section 272A(2)(c) of the Income Tax Act, 1961. The Tribunal found that the appellant had shown a reasonable cause for not furnishing the requisite information, leading to the decision to overturn the penalty order.

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