Income Tax Penalty Quashed Due to Reasonable Cause, Compliance Efforts.

The assessing officer conducted a best judgment assessment, adding unexplained cash deposits under section 68. The CIT(A) upheld a penalty for non-compliance with notices. However, the ITAT found the non-compliance was not willful but due to the negligence of the authorized representative, which was beyond the assessee's control. The show-cause notice lacked specificity, and the invoked provision was inapplicable. The assessee provided affidavits demonstrating reasonable cause, indicating the default was not intentional. The initial compliance efforts showed a willingness to cooperate, leading to the penalty being deemed unsustainable and the decision was in favor of the assessee. .....

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