HARDIK SHAH,MUMBAI vs. COMMISSIONER OF INCOME TAX (A) -50, MUMBAI

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ITA 1207/MUM/2022Status: DisposedITAT Mumbai10 August 2022AY 2014-154 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the COVID-19 pandemic constituted a reasonable cause for non-compliance with the notice. Therefore, the penalty levied under section 271(1)(b) was deleted, following a previous decision in the assessee's own case.

What were the facts?

The assessee filed returns in response to a notice under section 153A. Subsequently, penalty proceedings under section 271(1)(b) were initiated for non-compliance with a notice under section 142(1). The non-compliance was attributed to the COVID-19 pandemic.

What were the issues?

Whether the COVID-19 pandemic constitutes a reasonable cause for non-compliance with a notice under section 142(1), thereby warranting deletion of penalty under section 271(1)(b).

Which sections of the Income-tax Act were involved?

Section 153A,Section 142(1),Section 271(1)(b),Section 274,Section 273B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “ H”, MUMBAI

Before: SHRI PRAMOD KUMAR, VICE- & SHRI VIKAS AWASTHY

Hearing: 10/08/2022Pronounced: 10/08/2022

therefore, these appeals are taken up together and decided by this common order.

2.

Shri Haresh Joshi appearing on behalf of the assessee submitted that the assessee had filed return of income for the impugned assessment years in response to notice under section 153A of the Income Tax Act, 1961 [in short ‘the Act’]. After completion of assessment under section 153A of the Act, penalty proceedings under section 271(1)(c) of the Act were initiated and notice under section 274 r.w.s. 271 of the Act was issued to the assessee for respective assessment years. The Assessing Officer levied penalty under section 271(1)(b) of the Act levying penalty of Rs.10,000/- for non-compliance of notice issued under section 142(1) of the Act. The ld.Authorized Representative of the assessee submitted that penalty under section. 271(1)(b) of the Act for similar reasons were levied for assessment years 2015-16 to 2019-20. The penalty were confirmed by the CIT(A). The assessee carried the issue in appeal before the Tribunal in to 1212/Mum/2022. The Tribunal vide order dated 29/06/2022 deleted the penalty. The ld.Authorized Representative of the assessee submitted that in the impugned assessment years the reasons for non-appearance before the Assessing Officer is identical. The ld.Authorized Representative of the assessee prayed for deleting the penalty levied under section 271(1)(b) of the Act for the assessment years 2013-14 and 2014-15.

3.

Shri Tejinder Pal Singh representing the Department vehemently defended the impugned order for the respective assessment years and prayed for upholding the same and dismissing the appeals of the assessee.

3 आअसं. 1206/मुं/2022 (�न.व .2013-14) आअसं.1207/मुं/2022 (�न.व .2014-15) (A.Y. 2014-15)

4.

Both sides heard, orders of authorities below examined. The Assessing Officer vide order dated 20/02/2021 levied penalty of Rs.10,000/- under section 271 (1)(b) of the Act for non-compliance of the notice issued under section 142(1) of the Act. In the impugned assessment years, non- appearance/non-compliance of notice issued under section 142(1) of the Act has been attributed to unprecedented situation caused by COVID-19 Pandemic. We find that the Co-ordinate Bench of the Tribunal in assessee’s own case while adjudicating assessee’s appeals for assessment year 2015-16 to 2019-20 against the order confirming levy of penalty under section 271(1)(b) of the Act deleted the penalty by observing as under:

“ 4. A perusal of the submissions which was rendered before the Assessing Officer and ld. CIT(A), as incorporated in the appellate order, shows that the assessee had stated that, due to pandemic situation of Covid-19, the movement and attendance of the staff of authorised representatives and Chartered Accountant’s was seriously affected. There was practical difficulty in all these appeals as either the staff or their family members were infected with Covid and, therefore, even if part compliance was made, it was not a case for levy of penalty under Section 271(1)(b) of the Act.

5. Once the assessee has given such a reason and during that time the entire country was going through the pandemic situation of Covid-19 restrictions and despite that, assessee has made part compliance and later on, assessment has been completed under Section 153A/143(3) of the Act, then we do not find any reason as to why such a harsh step of initiating and levying of penalty under Section 271(1)(b) of the Act should be imposed for part non-compliance. In fact, the Hon'ble Supreme Court taking cognisance of the pandemic situation had extended the time limit from 15.03.2020 till 28.02.2022 though for the purpose of limitation. Now, the Assessing Officer is alleging that the assessee did not fully comply with notices dated 09.01.2021 and 01.02.2021 and even the ld. CIT(A) did not find it to be reasonable cause, which in our opinion is a too stringent view under these circumstances. Accordingly, we hold that there was sufficient reasonable cause within the ambit and scope of Section 273B of the Act and, therefore, penalty levied under Section 271(1)(b) of the Act of Rs.10,000/- in all the assessment years is directed to be deleted.”

4 आअसं. 1206/मुं/2022 (�न.व .2013-14) आअसं.1207/मुं/2022 (�न.व .2014-15) (A.Y. 2014-15)

5.

For parity of reasons impugned orders are set-aside and penalty order under section 271(1)(b) of the Act are deleted.

6.

In the result, appeal by assessee in &1207/Mum/2022 for assessment years 2013-14 and 2014-15, respectively are allowed.

Order pronounced in the open court on Wednesday the 10th day of August, 2022.

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