A Z DEVELOPERS,HYDERABAD vs. ITO., WARD-14(1), HYDERABAD

The brief facts of the case are that the assessee was subjected to reassessment proceedings u/s 147 of the Income Tax Act,1961 (“the Act”). During the course of the proceedings, the learned Assessing Officer (“Ld. AO”) issued notices u/s 142(1) of the Act dated 22/12/2021, 17/01/2022 and 17/02/2022 to the assessee, to which the assessee could not respond. Consequently, the Ld. AO initiated penalty proceedings under Section 271(1)(b) of the Act and levied a penalty of Rs.30,000/- by order dated 21.09.2022. The Ld. CIT(A) upheld the penalty, leading to the present appeal before us.

The Ld. AR submitted that, the non-compliance with the notices issued by the Ld. AO was due to the exceptional circumstances prevailing during the COVID-19 pandemic. It was contended that the notices were issued within the period covered under the suo motu order of the Hon’ble Supreme Court in Miscellaneous Application No. 21 of 2022, dated 10.01.2022, wherein the Hon’ble Apex Court extended the limitation period for all proceedings falling between 15.03.2020 and 28.02.2022, and further granted a grace period of 90 days from 01.03.2022.

The Ld. AR further submitted that, since the notices issued by the Ld. AO fell within this period, the delay in compliance should be condoned as per the relaxation provided by the Hon’ble Supreme Court. It was further contended that the default was neither willful nor intentional but was caused by the genuine difficulties faced during the pandemic.