SANGEETHA VELMURUGAN,CHENNAI vs. ITO NON CORP CIRCLE 19(1), CHENNAI

The assessee is an individual and filed the return of income for AY 2016-17 on 18.12.2017 declaring a total income of Rs. 36,20,430/-. The A.O received information that during the year under consideration the assessee has

We heard the parties and perused the material on record. The primary contention of the Ld. AR is that most of the notices by the AO were issued during the Covid-19 pandemic period and hence the assessee could not respond to the same. The Ld. AR further submitted that the notices were sent to the email address which was not in use and hence the assessee was not aware of the notices being sent. The Ld AR also submitted that there is a reasonable cause for not responding to the notices and as per the provisions of section 273B, the penalty is not warranted in the present case. While considering the issue of penalty under section 271(1)(b) of the Act, it is relevant to look at the provisions of section 273B of the Act which contains provisions to state that the penalty cannot be imposed under certain circumstances. The provisions of Section 273B read as under – “Penalty not to be imposed in certain cases. 273B. Notwithstanding anything contained in the provisions of clause (b) of sub- section (1) of section 271, section 271A, section 271AA, section 271B, section 271BA, section 271BB, section 271C, section 271CA, section 271D, section 271E, section 271F, section 271FA, section 271FAB, section 271FB, section 271G, section 271GA, section 271GB, section 271H, section 271-I, section 271J, clause (c) or clause (d) of sub-section (1) or sub-section (2) of section 272A, sub-section (1) of section 272AA or section 272B or

From the plain reading of the above section it is clear that the penalty under section 271(1)(b) cannot be levied if the assessee is able to prove that there was a reasonable clause for failure to respond to the notice under section 142(1) of the Act. In the context of the penalty provisions including the provisions of Section 271(1)(b), the word "reasonable cause" would mean a cause which prevents a reasonable man of ordinary prudence acting under normal circumstances, without negligence or inaction or lack of bona fide. In the light of the above legal position we will now look at the assessee's case.

We notice from the perusal of the table containing the list of notices issued by the AO that the notices were issued on 27.08.2021 and 17.09.2021. The Hon'ble Supreme Court has taken suo-motu cognizance of the difficulties faced by the tax payers and litigants and has excluded to the period from 15.03.2021 to 28.02.2022 from the period of limitation (2022 134 taxmann.com 37). The Apex Court also allowed a further period of 90 days from 01.03.2022 wherever the actual/balance period of limitation fell below such period of 90 days. From this it is clear that the Apex Court has considered the difficulty of the litigants in meeting the time lines and responding to notices during the pandemic and has accordingly has extended the period of limitation. In our considered view, the reasonable cause for non- response to the notices during the pandemic period also need to be examined in the same light and accordingly we see merit in the submission of the assessee. During the course of hearing it is brought to our notice that due to

In result the appeal of the assessee is allowed Order pronounced on 13th day of July, 2026 at Chennai.