HARI GOVIND TEXRAB (INDIA) PVT LTD,DELHI vs. ITO, WARD 11(1), DELHI

The only effective issue to be decided in this appeal is as to whether the Learned CIT(A) was justified in confirming the levy of penalty of Rs 40,000 under section 272A(1)(d) the Act in the facts and circumstances of the instant case.

We have heard the rival submissions and perused the materials available on record. The assessee is engaged in the business of manufacturing textiles and garments and had filed its return of income for the assessment year 2019-20 under section 139(1) of the Act declaring total income of Rs 33,65,579. The case of the assessee was sought to be reopened vide issuance of notice under section 148 of the Act on 5-4-2023. In response to the same, the assessee filed its return of income on 3-5-2023 declaring the same income of Rs 33,65,579. The assessment was completed under section 147 read with section 144B of the Act on 26-3-2025 determining total income of Rs 26,59,08,482 after making additions of Rs 26,25,42,903. During the course of reassessment proceedings, the Learned AO felt that the assessee had not complied with the notices issued under section 142(1) and 143(2) of the Act for which penalty proceedings under section 272A(1)(d) of the Act were initiated. This culminated ultimately in the levy of penalty under section 272A(1)(d) of the Act in the total sum of Rs 40,000. The action of the Learned AO in levying the penalty was confirmed by the Learned CIT(A).

On perusal of the provisions of section 272A(1)(d) of the Act, we find that the penalty is leviable for non-compliance to notice under section 142(1) and 143(2) of the Act. In the instant case, the notice under section 143(2) of the Act dated 11-6-2024 stood issued to the assessee fixing the due date of reply as 26-6-2024. The learned A.R. placed on record the copy of the notice under section 143(2) before us, wherein, we find that no details were asked by the learned A.O. Hence, even if there was no compliance to the notice under section 143(2) of the Act on the first date of hearing, no prejudice is caused to the revenue. Hence, penalty levied for non-compliance to notice under section 143(2) of the Act deserve to be deleted.

We find that notice under section 142(1) of the Act was issued on 8-8-2024, which was partially complied by the assessee on 11-11-2024. Thereafter the assessee had furnished replies on 21-11-2024, 28-2- 2025, 13-3-2025 and 22-3-2025 . Hence it could be safely concluded that the details were indeed furnished with delay by the assessee which alone prompted the Learned AO in not framing the reassessment under section 144 of the Act by making a best judgment assessment. Hence it could be inferred that the delay in not filing the details by the assessee had been practically condoned by the Learned AO in the quantum proceedings itself. Having done so, the levy of penalty under section 272A(1)(d) of the Act would have no legs to stand.

In view of the aforesaid observations, the penalty levied under section 272A(1)(d) of the Act is hereby directed to be deleted. Accordingly, the grounds raised by the assessee are allowed.

In the result, the appeal of the assessee is allowed.