SURESH KUMAR,MIRZAPUR vs. ACIT, , MIRZAPUR

This is an appeal preferred by the assessee against the order of the Ld. CIT(A)/NFAC, Delhi dated 23.03.2023 for AY. 2017-18 arising from penalty order passed u/s 272A(1)(d) of the Income Tax Act, 1961 (hereinafter “the Act”).

The assessee is an individual and filed his return of income on 25.03.2018 declaring total income of Rs.2,69,820/-. Later, the return was selected for scrutiny and accordingly, statutory notice u/s 143(2) & 142(1) of the Act were issued from time to time through online mode requisitioning certain papers and documents. The AO noted at para no. 3 of his order that during the course of assessment proceedings, the assessee had filed written submission dated 17.10.2019. And the contents of the same has been reproduced at para no. 3 of the assessment order. The AO thereafter issued notices and noted that the assessee had filed adjournment application and Suresh Kumar thereafter has framed the assessment u/s 143(3) of the act on 20.12.2019.

Coming to the facts relating to the imposition of penalty under challenge, it is noted that before the assessment was framed as noted (supra), the AO taking note that the assessee did not respond to the notice issued on 12.09.2019, had issued notice u/s 274 r.w.s 272A(1)(d) of the Act on 10.10.2019. Pursuant to which assesse filed his reply on 26.04.2021 and pleaded that fraud has been committed by some unknown persons, who had opened the bank account in his name in Axis Bank and deposited money in it and pleaded that no penalty be imposed on him for non-compliance to the notice dated 12.09.2019. However, according to the AO assesse did not file any reasonable cause for not levy of penalty and levied penalty of Rs.10,000/-. Aggrieved, assessee preferred an appeal before the Ld. CIT(A) who was pleased to confirm the same, since the assessee failed to comply with the statutory notice dated 12.09.2019. Aggrieved, the assessee is before this Tribunal.

I have heard both the parties and perused the record. It is noted that the AO had issued notice u/s 143(2) of the Act dated 22.09.2018 through online and notice u/s 142(1) of the Act through online. And the AO acknowledges that the assessee had replied to the same by letter dated 17.10.2019 which has been acknowledged by the AO at para no. 2 & 3 of his assessment order. However, since the assessee did not respond to the notice dated 12.09.2019, the AO issued show cause notice u/s 274 r.w.s. 272A(1)(d) of the Act on 10.10.2019 and Suresh Kumar after considering the reply of assesse imposed penalty on 10.01.2022. In this context, it is pertinent to note that pursuant to the notice of the AO, the assessee had replied vide letter dated 17.10.2019 and the submitted his written submission and the content of same has been recorded by the AO at para no. 2 & 3 of his assessment order. Thereafter, the AO has framed the assessment order us/ 143(3) of the Act on 20.12.2019. In the aforesaid facts and circumstances discussed (supra), according to me, assessee had made the compliance though after some delay well before the assessment order was framed as noted (supra). Therefore, it is not the case of non-compliance on the part of the assessee per-se to the notice issued on 12.09.2019 [assessee had replied and filed the written submission on 17.10.2019 and assessment u/s 143(3) of the Act was passed on 20.12.2019]. Thus, it is noted that the assessee had complied to the notice but belatedly. And thereafter, the AO has framed the assessment after considering the reply/written submission filed by the assesse; and therefore, the omission on the part of the assessee to have not replied to the specific notice dated 12.09.2019 does not warrant penalty. Even otherwise, as noted by this Tribunal in the case of Hanuman Prasad and Sons (ITA. No.20/Alld/2022) for AY. 2017-18 when AY. 2017-18 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 due to bonafide reason and not deliberate. And therefore, section 273B of the Act is applicable and accordingly the penalty levied by the AO u/s 272A(1)(d) of the Act is directed to be deleted.