RASAIYAN MARIYA ALASU RAJAN,CHENNAI vs. DCIT, NCC-8(1),, CHENNAI

The following grounds of appeal are raised by the assessee:

The brief facts of the case are that the assessee is an individual and had filed his return of income for the A.Y. 2016-17 on 30.11.2016 declaring a total income of Rs.83,41,140/-. The original assessment was completed u/s.143(3) of the Income Tax Act, 1961 ( the Act ) on 31.12.2018 after making an addition of Rs.40,80,500/-. Subsequently the assessment was reopened and completed u/s.144 r.w.s. 147 of the Act on 30.03.2022 determining total income of Rs.1,73,14,640/-. During the reopened assessment the AO issued statutory notices. However, the assessee did not respond to the notices of the AO. Subsequently, the penalty proceedings u/s.271(1)(b) was also initiated for non-compliance of notices issued.

During the reassessment proceedings the AO had issued statutory notices to file the required details for completing the assessment. However, the assessee had not responded to the said notices and hence the AO levied the penalty of Rs.40,000/- u/s.271(1)(b) of the Act for default in complying for four notices. Aggrieved by the order of the AO, the assessee preferred an appeal before the ld. CIT(A), NFAC, Delhi.

The ld. CIT(A) also passed an exparte order on 2016-17 due to non- participation in appellate proceedings. Aggrieved by the order of the ld. CIT(A), the assessee is in appeal before us.

The ld.AR submitted that the notices calling for information were issued by the AO to the assessee during the pandemic Covid 19 period affected to :-3-: ITA. Nos: 997/Chny/2025

Per contra, the ld.DR relied on the orders of the ld.CIT(A) and prayed for confirming the same since the assessee is a regularly non-compliant on the statutory notices issued by the AO as well as the ld.CIT(A).

We have heard both the parties, perused materials available on record and gone through orders of the authorities below. The fact with regard to the impugned dispute are that the assessee failed to comply to the notices issued by the AO for the A.Y. 2016-17 during the reassessment proceedings. Accordingly, the penalty u/s.271(1)(b) of the Act has been levied for non- compliances to the notices issued u/s.142(1) of the Act at Rs.10,000/- per notice for 4 notices i.e. Rs.40,000/-. On appeal to the ld.CIT(A), the penalty has been confirmed due to non-participation of the assessee in the appellate proceedings for A.Y.2016-17. On perusal of notices issued by the AO during the reassessment proceedings, we find that there was a huge impact of Pandemic Covid 19 in the entire nation during that period and the non- compliances had ‘reasonable cause’ on account of Covid 19 for notices issued upto December 2021. In the present facts and circumstances of the case, the AO has erred in levying penalty u/s.271(1)(b) for 4 times for non-compliances to the notices issued. In our considered view the assessee had a reasonable cause for non-compliance for three notices holding that the assessee had shown the ‘reasonable cause’ as per section 273B of the Act and hence we are inclined to delete the penalty to the tune of Rs.30,000/- and sustain the :-4-: ITA. Nos: 997/Chny/2025

In the result, the appeal filed by the assessee for A.Ys. 2016-17 is partly allowed.