MANISHKUMAR RAMLAKHAN AGRAWAL,AHMEDABAD vs. INCOME TAX OOFICER, WARD 6(1)(1), AHMEDABAD, AHMEDABAD

In appeal before the CIT(A), the assessee submitted that the non- compliance was neither wilful nor deliberate. The assessee submitted that he had relied on his AR, who failed to respond to the notices and also failed to inform the assessee about the default. The assessee submitted he was unaware of the lapse on the part of his AR, until the demand notice was received by Manishkumar Ramlakhan Agrawal vs. ITO Asst. Year –2018-19 - 3– the assessee after completion of the reassessment proceedings. It was further submitted that the lapse occurred due to a bonafide mistake and that there was sufficient and reasonable cause, for which the assessee should be protected under section 273B of the Act. The assessee relied on various judicial precedents, including the judgment of the Hon’ble Supreme Court in Hindustan Steel Ltd. vs. State of Orissa (83 ITR 26), to argue that penalty should not be levied for a technical or venial breach of law unless the conduct was contumacious or dishonest. The assessee also placed reliance on ITAT decisions, including Sardarmal Kothari v. ACIT, which held that when the assessment is completed under section 143(3) and not section 144, the defaults committed earlier can be viewed as condoned, and penalty under similar provisions should not be imposed. Despite these submissions, the Ld. CIT(A) was not satisfied with the assessee’s explanation. Ld. CIT(A) observed that there was no dispute regarding the non-compliance of statutory notices under section 142(1) of the Act. The Ld. CIT(A) held that lack of coordination between the assessee and his AR cannot be accepted as a valid or reasonable cause under section 273B of the Act. It was also noted that the assessment had been completed under section 147 read with section 144B of the Act, and not under section 143(3) of the Act. Therefore, in the absence of any compliance to the impugned notices, the Ld. CIT(A) upheld the penalty of ₹20,000/- levied by the Assessing Officer under section 272A(1)(d). Asst. Year –2018-19 - 4– on record. It is not in dispute that the assessee failed to comply with two notices issued under section 142(1) of the Act. However, it has been explained by the counsel for the assessee that the non-compliance occurred solely due to the authorized representative of the assessee being out of town for a brief period, which led to an inadvertent lapse in communication between the assessee and his AR and thereby leading to failure to seek adjournment or submit the required details. We are of the considered view that the explanation offered by the assessee appears to be bonafide and does not show any deliberate defiance or contumacious conduct. The assessee has also relied on established judicial precedents which have held that penalty under such provisions should not be levied where there exists reasonable cause and where the breach is neither willful nor intentional. In our considered view, the explanation provided, coupled with the overall conduct of the assessee, does constitute a reasonable cause. Accordingly, we are of the considered view that the levy of penalty under section 272A(1)(d) of the Act, in the present case, is not justified.

Accordingly, we direct that the penalty of ₹20,000/- levied under section 272A(1)(d) of the Act be deleted.

In the result, the appeal of the assessee is allowed. This Order pronounced in Open Court on 25/08/2025 (DR. BRR KUMAR) JUDICIAL MEMBER Ahmedabad; Dated 25/08/2025 TANMAY, Sr. PSITA No. 920/Ahd/2025 Asst. Year –2018-19 - 5–

""थ" / The Respondent. संबंिधत आयकर आयु" / Concerned CIT 3. 4. आयकर आयु"(अपील) / The CIT(A)- 5. िवभागीय "ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad गाड" फाईल / Guard file. 6. आदेशानुसार/ BY ORDER,