The New Delhi bench of the Income Tax Appellate Tribunal (ITAT) recently allowed the exemption under Section 272(1) due to compliance with the statutory notice under Section 142 (1) of Income Tax Act 1961.
The appeal was filed by assessee, Agrasar Education Ltd against the order of assessment passed under Section 272A(1)(d) of the Income Tax Act, 1961. The only issue of the case was whether the CIT (A) was justified in confirming the levy of penalty under Section 272A(1)(d) of the Income Tax Act.
The return filed by the assessee was selected for scrutiny by the Assessing Officer. In the course of assessment proceedings, the Assessing Officer issued notice under Section 142(1) of the Income Tax ensuring compliance of the assessee.
According to the Assessing Officer, the said notice was not complied with by the assessee and hence penalty under Section 272 A(1)(d) of the Income Tax Act was levied in the sum of Rs 10,000/-. The assessment was framed under Section 144 of the Income Tax Act determining total income of the assessee at Rs 46,02,740/- as against the returned income of Rs 1,02,740/-.
According to Section 142(1) of the Income Tax Act, the Income Tax Officer issues a notice to the assessee, requesting further details and documents after filing the return.
Before the CIT (A)-NFAC, it was submitted that the assessee had sought some time in electronic mode by requesting in income tax portal, to furnish the requisite details as its authorized representative Shri K C Garg was preoccupied with filing of tax audit returns.
Later all the details called for by the Assessing Officer were duly furnished in the income tax portal in electronic mode. The CIT (A) however observed that no such compliance was made by the assessee and accordingly upheld the levy of penalty under Section 272A (1) (d) of the Income Tax Act.
Section 272A (1) (d) of the Income Tax Act provides that if one fails to comply with the provisions of section 139A, he shall pay, by way of penalty, a sum which shall not be less than five hundred rupees but which may extend to ten thousand rupees for each such default or failure.
The two-member Bench of Accountant Member M. Balangesh and a Judicial Member C.M. Garg observed that “We find that the counsel for the assessee had placed on record the evidence of having sought an adjournment in income tax portal from the Assessing Officer by stating the reason that its authorized representative Shri K C Garg is busy with filing of tax audit returns and information called for require some time for compilation. The evidence in this regard is placed on record by the counsel .Moreover, the assessee had also furnished the complete details called for before the Assessing Officer. Hence we hold that the assessee had indeed complied with the statutory notice under Section 142(1) of the Income Tax Act by seeking adjournment and later furnishing the requisite details. Hence there cannot be any levy of penalty under Section 272A(1)(d) of the Income tax Act for non-compliance with statutory notice. Accordingly, the ground raised by the assessee is allowed.”
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