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Facts
The assessee filed her return of income, which was selected for scrutiny. Statutory notices were issued, but the assessee did not respond. Consequently, the assessment was completed under section 144, and penalty proceedings were initiated under section 272A(1)(d) for non-compliance with notices. The assessee claimed she was in her village in Gujarat without internet access.
Held
The Tribunal held that the assessee had sufficiently explained the reason for non-compliance with the statutory notices due to her absence in a remote village without internet facility. Therefore, there was a reasonable cause for the failure, and the penalty levied under section 272A(1)(d) was not justified.
Key Issues
Whether there was a reasonable cause for the assessee's non-compliance with statutory notices, and if the penalty under section 272A(1)(d) was justified.
Sections Cited
250, 272A(1)(d), 143(2), 142(1), 144, 50C
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
Before: SHRI SANDEEP SINGH KARHAILSHRI GIRISH AGRAWAL
Date of Hearing – 24/02/2025 Date of Order – 03/03/2025
O R D E R PER SANDEEP SINGH KARHAIL, J.M. The assessee has filed the present appeal against the impugned order dated 13/11/2024, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], which in turn arose from the penalty order passed under section 272(1)(d) of the Act, for the assessment year 2017-18.
2 Jyotsanaben Chandrakant Patel. ITA No. 68/M/2025
In this appeal, the assessee has raised the following grounds:
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1. On the facts and circumstances of the case, the learned CIT(A) erred in confirming the Penalty levied u/s.272A(1)(d) of the Act of Rs.30,000 though there were sufficient and reasonable cause for non-attendance to the said notices. 2. a) On the facts and circumstances of the case, the learned CIT(A) erred in not fully considering the reasons for noncompliance of the notice during the assessment proceedings. b) The learned CIT(A) erred in not considering the fact that the appellant was staying at remote village having not internet facility and hence no notice were received by the appellant. 3. a) On the facts and circumstances of the case and in law, learned CIT(A) erred in passing the order only on the basis of assessment order without considering the submission given by the appellant. b) The learned CIT(A) erred in not considering the full submission made before him. The notices were given without providing sufficient time to reply cannot be treated as non-compliance u/s.272A(1)(d) of the Act.”
We have considered the submissions of both sides and perused the material available on record. The brief facts of the case are that the assessee is an individual, and for the year under consideration, filed her return of income on 28/02/2018, declaring a total income of INR 39,57,150. The return filed by the assessee was selected for scrutiny, and statutory notices under section 143(2) and section 142(1) of the Act were issued to the assessee. Since the assessee did not respond to the notices issued during the assessment proceedings, the Assessing Officer (“AO”) proceeded to conclude the assessment on best judgment basis under section 144 of the Act, by taking into consideration the response received from the Office of the Sub- Registrar Taluka-3, Ambernath. Vide order dated 11/12/2019 passed under section 144 of the Act, the AO computed the long-term capital gains of INR 2,37,11,500 under section 50C of the Act.
3 Jyotsanaben Chandrakant Patel. ITA No. 68/M/2025
In the meanwhile, penalty proceedings under section 272A(1)(d) of the Act were initiated for non-compliance of the statutory notices issued under section 143(2)/section 142(1) of the Act. In response to the notice issued under section 272A(1)(d) of the Act, the assessee submitted that she could not respond to the statutory notices as she had gone to her village in Gujarat from 15/10/2019 to 23/12/2019, and did not have any computer facility to access the Income Tax Department’s website. The AO, vide order dated 13/08/2021, disagreed with the submissions of the assessee and held that the assessee intentionally avoided complying with the statutory notices issued during the assessment proceedings. Accordingly, the AO levied a penalty of INR 50,000 (INR 10,000 for each default) under section 272A(1)(d) of the Act.
The learned CIT(A), vide impugned order, granted partial relief to the assessee and restricted the penalty to an extent of INR 30,000. Being aggrieved, the assessee is in appeal before us.
From the perusal of the record, it is evident that during the assessment proceedings following statutory notices under section 143(2) and section 142(1) of the Act were issued to the assessee: -
Sr. Notice under section Date of issuance of notice Remarks No. 1. Section 143(2) 08/08/2018 Non-compliance 2. Section 142(1) 31/10/2019 Non-compliance 3. Section 142(1) 01/11/2019 Non-compliance 4. Section 142(1) 11/11/2019 Non-compliance 5. Final show cause 06/12/2019 Non-compliance notice
4 Jyotsanaben Chandrakant Patel. ITA No. 68/M/2025
In the paper book, the assessee has filed an affidavit, wherein it has been submitted that during the period when the statutory notices under section 142 (1) of the Act were issued to the assessee, she had gone to her village in Gujarat, where there was no Internet facility, and therefore, she could not excess the notices issued by the AO. It is further submitted that the assessee does not have any regular tax consultant who can keep track of the notice, etc. on the Income Tax Portal. Accordingly, the assessee pleaded that there was no mala fide intention or negligence on her part for not attending the proceedings before the AO. The affidavit filed by the assessee is reproduced as follows for ready reference: –
“I, Jyostnaben Chandrakant Patel, an Indian Inhabitant of 58 years would like to solemnly affirmed and declared as under:- 1) I am aware of the facts of my case 2) My case was taken up for Scrutiny in the month of October to December, 2019. I had go on to native place for Diwali family gathering. Therefore, I was not in Mumbai during the said period 3) I had gone to Village-Kimbuva, Ta-Saraswati, Dis-Patan, North Gujarat, Pin- 384285. This place is very small village having no internet facility I was not having a smart phone on which e-mail can be verified, In view of that I had occasion to verify emails received on my e-mail ID. 4) I was also not having any regular Tax Consultant who can verify the notice s etc. on my Portal. 5) In view of the above facts, in facts the whole assessment was passed u/s.144 of the Act making high pitch addition of Rs.2,37,11,500 6) There was no malafide intension or negligence on my part for not attending before the Assessing Officer. 7) In view of the above facts there was reasonable cause for not giving response before the AO”
From the perusal of the aforementioned affidavit, we find that the assessee provided the complete details of the place of her village, where she
5 Jyotsanaben Chandrakant Patel. went at the time of assessment proceedings. We further find that all the notices by the AO under section 142(1) of the Act, seeking details from the assessee, were issued within a short span of less than 40 days, during which the assessee has claimed that she had gone to her village in Gujarat. Having considered the submissions of both sides and perused the material available on record, we are of the considered view that the assessee has sufficiently explained the reason for non-compliance with the statutory notices issued by the AO during the assessment proceedings. Thus, there was reasonable cause for such failure. Accordingly, we are of the considered view that this is not a fit case for the levy of penalty under section 272A(1)(d) of the Act. Accordingly, the grounds raised in the present appeal are allowed and the AO is directed to delete the penalty.
In the result, the appeal by the assessee is allowed. Order pronounced in the open Court on 03/03/2025.