Assessee duly complied with Notices Issued: ITAT deletes Penalty [Read Order]

Income Tax Appellate Tribunal (ITAT), Cuttack deleted penalty as assessee duly complied with notices issued under Section 142(1)(i).

The appellant assessee, Sudhi Jain, is an individual having PAN AIGPJ6846F, was issued a notice u/s 142(1)(i) of the IT Act for the AY 2017-18 (FY 2016-17) to furnish correct return of income for the impugned AY before 03.01.2018. On non-response of the assessee the assessment was completed u/s 144 of the Act determining the total Income of the assessee at Rs. 48,80,520/-. Penalty proceedings U/s 271F for failure to file the return of Income within the assessment year, in response the assessee filed a petition for stay of penalty proceedings and to keep the demand in abeyance for PAN –ACXPJ2118B for the AY 2017-18.

The AO observed that the 271F proceedings which were initiated on the assessee for PAN number AIGPJ6846F and not on against the PAN ACXPJ2118B, assessee again requested to keep the proceedings under section 271F in abeyance till the disposal of appeal on verification it was observe by the AO that the assessee has not filed appeal under the PAN number AIGPJ6846F on which the penalty proceedings were initiated accordingly penalty under section 271F for Rs. 5000 was imposed by order dated 22/02/2020. Aggrieved with action of AO, assessee filed an appeal with the CIT(A). The CIT(A) in his order u/s 250 of the ACT dismissed the appeal as invalid and not maintainable in law.

In the same case, penalty proceedings u/s 272A(1)(d) were also initiated on the assessee for non-compliance of order u/s 142(1)(i) of the IT Act for Rs. 10,000/- vide order u/s 272A(1)(d) dated 22/06.2020. On appeal by the assessee before the CIT(A) a similar stand has taken by the CIT(A) and dismissed the appeal of the assessee.

C M Garg, Judicial Member and Arun Khodpia, Accountant Member observed that “Assessee had taken steps to surrender another PAN issued to her to show her bonafide intentions towards the tax compliance. Therefore, we are of the considered view that return of income was duly filed by the assessee and transaction under question were also disclosed which are subject to assessment by the AO, so penalty u/s 271F for failure to furnish the return of income u/s 139(1) of the act cannot be imposed.

Penalty under section 272A (1)(d) can only be imposed on an assessee if the assessee fails to comply towards the notice issued under sub-section (1) of section 142 or sub-section (2) of section 143 of fails to comply with a direction issued under sub-section (2A)of section 142.”

To Read the full text of the Order CLICK HERE

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