No Subsequent Imposition of Penalty to be made Once Notice Complied and Documents Timely Filed: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT), Allahabad Bench, has recently, in an appeal filed before it, held that no subsequent imposition of penalty can be made once the assessee has complied with the notice and has also filed the documents while framing the assessment.

The aforesaid observation was made by the Tribunal when an appeal was filed before it by the assesse, as against the order dated 15.06.2022 of CIT(A) (National Faceless Appeal Centre, Delhi), arising from penalty order passed u/s 272A(1)(d) of the Act for the assessment year 2017-18.

With the facts of the case being that the assessee was a partnership firm who filed its return of income for the year under consideration on 22nd October, 2017 declaring total income of Rs. 44,680/, the assessment was framed under section 143(3) on 28th December, 2019.

During the course of assessment proceedings, the Assessing Officer was of the view that the assessee had not complied with the notice under section 142(1) dated 18th November, 2019, consequent to whichpenalty proceedings were initiated against it by issuing a show cause notice under section 274 r.w.s. 272A(1)(d) of the Income Tax Act.

With the Assessing Officer levying the penalty of Rs. 10,000/-, vide order dated 10.1.2022under section 272A(1)(d), the assessee filed an appeal before the CIT(A) but could not succeed and thus preferred the instant appeal before the Tribunal.

The submission of the assesseein the instant appeal being that it has duly complied with the notice under section 142(1) dated 18th November, 2009, filed the reply as well as other requisite details & documents and hence that the aforesaid the levy of penalty is not valid and is liable to be quashed,the Tribunal observed as follows:

“It is not a case of non-compliance on the part of the assessee to the notice issued under section 142(1) dated 18.11.2019 but the compliance was made belatedly. And as theassesseehas made the compliance and the assessment was framed after considering the reply and the document filed by the assessee, it does not fall in the category of non-compliance by the assessee at all”.

“Hence, in the facts and circumstances of the case when the assessee finally complied with the notice and the Assessing Officer has duly considered the reply and the documents filed by the assessee while framing the assessment, then the subsequent penalty levied by the Assessing Officer is not justified”, it added.

Thus, allowing the assessee’s appeal, the Tribunal commented:

“Even otherwise, when this is the year of changing the mode of assessment proceedings from physical to digital /electronically, then, the delay in compliance due to change in the mode of communication and proceedings is a bonafidereason and not deliberate. Accordingly, the penalty levied by the Assessing Officer under section 272A(1)(d) is deleted”.

Support our journalism by subscribing to TaxscanPremium. Follow us on Telegram for quick updates.