Pune bench of Income Tax Appellate Tribunal ( ITAT ) chaired by Viswanethra Ravi (Judicial Member) and Inturi Rama Rao (Accountant Member) deleted the penalty for non-compliance with the notice issued under section 142(1) of Income Tax Act, 1961.
Since all of the appeals include the same facts and core issues, the bench heard individual appeals brought by several assessees in response to separate orders of the Commissioner of Income Tax (Appeals) [CIT(A)] confirming the penalty under section 272A(1)(d) of the Income Tax Act, 1961.
The appellant filed returns declaring total income of Rs.4,13,19,470 and was taken for the scrutiny assessment.
The Assessing Officer (AO) had issued a show cause notice on calling upon the appellant to explain as to why the penalty should not be levied under section 272A(1)(d) of the Income Tax Act.
Further, AO levied a penalty of Rs.10,000 for non-compliance of notice issued under section 142(1) of Income Tax Act.
Even on appeal before the CIT(A), confirmed the levy of penalty, as the appellant had failed to explain the reasons for non-compliance of notice under section 142(1) of Income Tax Act.
From the material on record, the bench observed that when the appellant sought time to file the details, the said application was not disposed of by the AO either rejecting the said application or granting time.
Moreover, the assessment was completed by the AO under section 143(3) of the Income Tax Act accepting the returned income.
The tribunal noted that the AO had not suffered any harm as a result of failing to comply with the notice required by section 142(1) of the Income Tax Act, and that the appellant would be given reason to believe that the requested extension of time had been granted if the AO had not responded to the assessee’s adjournment petition.
After taking everything into consideration, the tribunal found that the appellant had engaged in contumacious behaviour by refusing to abide by the notification issued pursuant to section 142(1) of the Income Tax Act. As a result, it does not qualify for the penalty to be imposed under section 272A(1)(d) of the Income Tax Act.
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