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TMI Blog2025 (1) TMI 498X X X X Extracts X X X X X X X X Extracts X X X X ..... representative, which was beyond the control of the assessee. There are many judicial precedents where it is held that an assessee should not be penalized for the omissions or errors of their legal representative when the assessee has placed bona fide reliance on them. In the present case, the failure of the representative to communicate notices cannot be attributed to any fault of the assessee, who is a senior citizen relying on professional guidance for compliance. The show-cause notice issued by the AO under Section 274 r.w.s. 272A(1)(d) of the Act failed to specify the exact section or details of non-compliance. Instead, it vaguely referred to multiple provisions [Sections 143(2), 142(1), 142(2A)] without clearly identifying the specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shatriya, ARs For the Revenue : Shri Nitin Kulkarni, Sr.DR ORDER PER MAKARAND V. MAHADEOKAR, AM: This appeal by the assessee is directed against the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as CIT(A) ), dated 30.08.2024, confirming the penalty of Rs. 20,000/- levied by the Assessing Officer (hereinafter referred to as AO ) under Section 272A(1)(d) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) vide assessment order dated 12/12/2019 for the Assessment Year (AY) 2017-18. Facts of the Case: 2. The assessee is a senior citizen deriving income from pension and bank interest. The return of income for A.Y.2017-18 was filed on 19.07.2017 decla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng grounds of appeal: 1. On facts and circumstances of the case and in law, the order passed by the Ld. CIT(A) is bad in law, illegal besides being in violation of principle of natural justice equity, as passed without considering the material already placed on record, as such it is liable to be quashed and set aside. 2. On facts and circumstances of the case and in law, the Ld. CIT(A) has grossly erred in sustaining the impugned penalty of Rs. 20,000/-u/s.272A of the Act so levied by the A.O. when there is no justification in doing so. The impugned order may kindly be set aside and penalty u/s. 272A of the Act may kindly be directed to be deleted. LEAVE CRAVED The appellant craves leave to add, alter, amend and/or withdraw any of the groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... multiple clients matters and inadvertently failed to convey the notices to the assessee and the penalty notice u/s 272A(1)(d) of the Act and recovery demand notice were only discovered when the assessee received a physical recovery notice from the AO on 30.01.2020. The AR stated that upon discovery, the assessee took immediate steps to comply and filed an appeal against the assessment order and penalty. However, despite this detailed explanation, as stated by the AR, the CIT(A) summarily dismissed the affidavits as afterthoughts and failed to conduct an inquiry or provide an opportunity for rebuttal, violating the principle of natural justice. The AR relied on judicial precedents, including Glass Lines Equipments Co. Ltd. v. CIT (253 ITR 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supported the orders of the AO and the CIT(A), contending that multiple opportunities were provided to the assessee for compliance, which the assessee failed to utilize. 7. After considering the rival submissions and perusing the material on record, we find that the assessee submitted affidavits explaining the reasons for non-compliance, asserting that the communication failure was due to his representative s inaction. However, the CIT(A) summarily dismissed the affidavits as afterthoughts without providing an opportunity for cross-examination or conducting an independent inquiry. This action amounts to a violation of the principles of natural justice. The Hon ble Jurisdictional High Court in the case of Glass Lines Equipments Co. Ltd. v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hanical and baseless approach by the AO, further rendering the penalty proceedings unsustainable. 7.3. Section 273B of the Act provides relief from penalties under Section 272A(1)(d) of the Act, if the assessee can demonstrate a reasonable cause for non-compliance. In this case, the affidavits filed by the assessee and the authorized representative explain the genuine reasons behind the non-compliance. There was no evidence to suggest any mala fide intent or willful defiance by the assessee. Therefore, the penalty imposed does not stand in light of the reasonable cause demonstrated by the assessee. The assessee complied with the initial notice u/s 143(2) of the Act on 01.10.2018 and only failed to comply with subsequent notices due to a com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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