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Facts
The assessee's appeal was directed against an order dismissing their appeal against a penalty levied under Section 271(1)(b) for failure to comply with a notice under Section 142(1). The assessee contended that they could not comply due to their mother's illness and subsequent death.
Held
The Tribunal condoned the 20-day delay in filing the appeal, finding sufficient cause due to medical exigency. It was held that the assessee was prevented by reasonable cause from complying with the notice, and the default was not deliberate.
Key Issues
Whether the penalty levied for non-compliance with a notice under Section 142(1) should be deleted when the assessee provides a reasonable cause for non-compliance due to a family medical emergency.
Sections Cited
250, 271(1)(b), 142(1), 143(1), 147, 144, 273B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
order : 07.05.2025 O R D E R [ Per Rahul Chaudhary, Judicial Member: 1. The present appeal preferred by the Assessee is directed against the order, dated 14/10/2024, passed by the National Faceless Assessment Centre, Delhi, [hereinafter referred to as ‘the CIT(A)’] under Section 250 of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] whereby the Ld. CIT(A) had dismissed the appeal against the Penalty Order, dated 01/01/2022, passed under Section 271(1)(b) of the Income Tax Act, 1961 for the Assessment Year 2013-2014. As per the registry there is a delay of 20 days in filing the present appeal. In the application seeking condonation of delay it has been explained that the delay in filing the appeal was caused since the counsel for the Assessee was required to attend to immediate Assessment Year 2013-2014 family on account of medical exigency. Therefore, we hold that the there was sufficient cause for not filing the appeal within prescribed time and therefore, delay of 20 days in filing the present appeal is condoned. Accordingly, we proceed to adjudicate the following grounds raised by the Assessee in the present appeal:
“1. That on the facts and circumstances of the case and in law, the Ld. Commissioner of Income tax (Appeals) (hereinafter referred to as 'Ld. CIT (A)'] has grossly erred in upholding the levy of penalty u/s 271(1)(b) of the Income Tax Act, 1961.
2. That on the facts and circumstances of the case and in law, the Ld. CIT (A) has grossly erred in not appreciating the Appellant had substantiated the reasons for non compliance to the notices issued under section 142(1) of the Income tax Act 1961”.
We have heard both the sides and perused the material on record.
The relevant facts in brief are that the penalty of INR.10,000 was levied on the Assessee under Section 271(1)(b) of the Act for failure to comply with the notice, dated 31/08/2021, issued under Section 143(1) of the Act. Before the CIT(A), it was submitted that mother of Assessee was not keeping well and therefore, notice under Section 142(1) of the Act could not be complied with. However, the CIT(A) declined to grant any relief observing that the Assessee had not participated in the assessment proceedings and assessment was completed under Section 147 read with Section 144 of the Act. Being aggrieved, the Assessee has preferred the present appeal before the Tribunal. The Assessee had placed on record death certificate of her mother in support of the contention that she was not keeping well at the relevant time and therefore, notice issued under Section 142(1) of the Act could not be complied with. We note that notice under Section 142(1) of the Act was issued on 31/08/2021. As per the death certificate, the mother of the Assessee passed away on 2 Assessment Year 2013-2014 31/03/2022. The accompanying medical reports show that she was undergoing medical treatment at the relevant point of time. Therefore, we hold that the Assessee was prevented by reasonable cause from complying with the notice under Section 142(1) of the Act and the default committed by the Assessee was not deliberate. Accordingly, we delete the penalty of INR.10,000/- levied under Section 271(1)(b) of the Act for non-compliance of notice, dated 31/08/2021, issued under Section 142(1) of the Act keeping in view the provisions contained in Section 273B of the Act. In terms of aforesaid, Ground No.1 and Ground No.2 raised by the Assessee are allowed.
In result, the appeal preferred by the Assessee is treated as allowed.