AMIT JAIN,KOTA, RAJASTHAN vs. CIRCLE (INTL TAX), JAIPUR, JAIPUR

3. The Ld. CIT(A) further erred in not appreciating that the provisions of Section 272A(1)(d) are not absolute in nature and are subject to reasonable cause as contemplated under Section 273B of the Act. The explanation provided by the appellant was ignored without proper reasoning, thereby violating principles of natural justice.

4. The penalty imposed under Section 272A(1)(d) is excessive and arbitrary, particularly in light of the appellant's full compliance with other statutory notices and submissions during the assessment proceedings. The penalty ought to be quashed in the interest of justice.

5. The appellant reserves the right to amend, alter, modify, or withdraw any grounds of appeal and to submit additional grounds as may be deemed necessary.”

3. Succinctly, the fact as culled out from the records is that in the assessment proceedings, the notice issued u/s 142(1) of the Act on 11.10.2023 was issued wheren ld. AO called for certain information and thereby the same was issued in ITBA portal. Ld. AO noted that this notice 272A(1)(d) of the Act and thereby vide order dated 13.11.2024 levied a penalty of Rs. 10,000/- for the non-compliance of the notice issued on 11.10.2023.

4. Aggrieved from the order of levy of penalty by the ld. AO, assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised the relevant finding of the ld. CIT(A) is reiterated here in below:

, penalty order u/s 272A(1)(d) of the IT Act, 1961 and reply of the appellant. Ground No. 1 relates to the imposition of penalty.

6. On perusal of the penalty order, it is seen that appellant was issued notices u/s 142(1) of the Income Tax Act, 1961 dated 11.10.2023, 14.10.2024 and show cause notice was also issued on 02.03.2024 for submission of details with respect to the purchase of time deposits and payment made to non residents but the appellant did not furnish complete reply. Due to non-compliance on the part of the assessee, the Assessing Officer stated that penalty proceedings u/s 272A(1)(d) of the Act were initiated. During the course of penalty proceedings, a show cause notice dated 17.05.2024 and 27.09.2024 was issued to the assessee with respect to the non-compliance of notice u/s 142(1) of the Act dated 11.10.2023 requiring to show cause as to why an order imposing a penalty should not be made u/s 272A(1)(d) of the Act. In reply thereto, the assessee has filed written submission which was duly considered by the AO but not found acceptable.

7. During the course of penalty appellate proceedings, the assessee has furnished written submission on 04.01.2025 stating the assessee had duly complied of each and every notice of the LD.AO. However, the delay in submitting the reply to notice dated 11.10.2023 was genuine and bona fide. Further, the assessee has merely stated that he has filed an appeal against the said assessment order, however, has failed to bring on record the reasonable cause for non-compliance to the various statutory notices issued. The Assessee has failed to discharge the primary onus cast upon him to furnish any reasons as to why the penalty should not be levied in his case and as to why the provisions Amit Jain vs. Circle (Intl. Tax), Jaipur of section 272A(1)(d) of the Act are not applicable to his case. There is a well- known dictum of law "Vigilantibus Non Dormientibus Jura Subveniunt which means that the law assists only those who are vigilant and not those who are careless of their right. Law confers rights on persons who are vigilant of their rights. The assessee has failed to discharge his duty, exercise his rights to be heard and has scant regard for due process of law. Therefore, there is no other option but to finalize the proceedings based on material available on record. Based on the facts and circumstances of the case, it can be concluded that the assessee has failed to prove that there was a reasonable cause for failure to comply with the aforesaid statutory notices. Penalty u/s 272A(1)(d) is not relatable to the income computed and not consequential to addition(s) made during assessment but it is for non-compliance to statutory notices u/s 142(1) of the Act. The fact remains that the assessee did not comply with the notice(s) u/s 142(1) of the Act during the course of assessment proceedings and the assessee has failed to furnish any justifiable explanation for the non-compliance and, therefore, penalty u/s 271(1)(b) of the Act is leviable for the default(s) under consideration for the given assessment year. The assessee has failed to prove that there was reasonable cause as per the section 2738 of the Act for non- compliance to the statutory notice(s) in question.

7. As has been stated in the assessment order as well the penalty order also, repeated opportunities were afforded to the appellant during the assessment proceedings to explain the transaction entered by the appellant during the year, but the appellant failed to provide complete detail. Further, during the penalty proceedings the appellant was asked by the Assessing Officer to state the reasons for non-compliance to the statutory notice but the appellant could not give any satisfactory reply supported by evidences, therefore, penalty of Rs. 10,000/- u/s 272A(1)(d) IT Act, was imposed.

8. During the course of appellate penalty proceedings, it has been noticed that in the penalty order, AO has mentioned that during the assessment proceedings, notice u/s 142(1) of the Act dated 11.10.2023 was issued, calling for certain information, fixing the case for hearing which was sent through the ITBA system but the assessee did not file reply to the same within prescribed period. The assessee has sought adjournment on 05.11.2023 stating the Due to illness in my family, I am away from home, and I do not have access to all the documents required in the response. Kindly grant me extension till November 15th 2023 to submit the response with required documents. A plain reading of the reply filed by the appellant reveals that it is a generic reply which in absence of any supporting evidence in favour of the contentions of the appellant is no more than a statement based on conjectures and surmises. The contentions of the appellant do not appear to be plausible.

9. Based on the facts mentioned above in detail, it is evident that the appellant did not file any reply in response to the notice issued u/s 142(1) of the Income Tax Act, 1961 dated 11.10.2023 and that during the penalty proceedings and Amit Jain vs. Circle (Intl. Tax), Jaipur also during the penalty appellate proceedings could not justify the non- submission of reply to the statutory notice. Assessee has not filed any documentary evidence/information in support of his contention, although, sufficient and adequate opportunities were afforded to the appellant for the same. Therefore, it can be safely concluded that the appellant has deliberately avoided making compliance during the course of assessment proceedings with respect to the notice issued u/s 142(1) of the Income Tax Act, 1961 on 11.10.2023. Hence, penalty imposed by the AO u/s 272A(1)(d) of the Income Tax Act, 1961, for non- compliance of notice dated 11.10.2023 amounting to Rs. 10,000/-is hereby upheld. Thus, ground no. 1 is dismissed.

5. As the assessee did not find any favour, from the appeal filed before the ld. CIT(A), the assessee has preferred the present appeal before this Tribunal on the ground as reproduced hereinabove. To support the various grounds so raised by the assessee, ld. AR of the assessee has filed the written submissions in respect of the various grounds raised by the assessee and the same is reproduced herein below:

This is in response to an appeal filed by the assessee against the order passed by the Hon’ble CIT, Appeals, Delhi-42 dated 24.01.2025 for the assessment year 2019-20. The assessee has raised the following grounds in the appeal:

1. Under the facts and circumstances of the case, the Ld. CIT(A) erred in upholding the penalty of Rs. 10,000/- levied under Section 272A(1)(d) of the Income Tax Act, 1961, for non-compliance with the notice dated 11.10.2023, despite the fact that the appellant had subsequently submitted a detailed reply addressing the notice and fully cooperated in the assessment proceedings. It is humbly submitted that the penalty order deserves to be quashed and set aside.

2. Without prejudice to Ground No. 1, the Ld. CIT(A) failed to consider that the appellant’s delay in compliance with the notice dated 11.10.2023 was due to genuine and reasonable causes, as specified under Section 273B of the Act. The appellant provided a valid explanation citing unavoidable personal circumstances, including illness in the family, and had proactively requested an extension. Additionally, the Ld. CIT(A) erred in holding that the appellant deliberately avoided compliance, despite evidence demonstrating that all subsequent notices were duly complied with in a timely manner. This establishes that there was no willful or intentional non-compliance, and the penalty under Section 272A(1)(d) was wrongly imposed.

3. The Ld. CIT(A) further erred in not appreciating that the provisions of Section 272A(1)(d) are not absolute in nature and are subject to reasonable cause as contemplated under Section 273B of the Act. The explanation provided by the appellant was ignored without proper reasoning, thereby violating principles of natural justice.

4. The penalty imposed under Section 272A(1)(d) is excessive and arbitrary, particularly in light of the appellant’s full compliance with other statutory notices and submissions during the assessment proceedings. The penalty ought to be quashed in the interest of justice.

5. The appellant reserves the right to amend, alter, modify, or withdraw any grounds of appeal and to submit additional grounds as may be deemed necessary.

The Brief facts of the case were that: The brief facts of the case are that for the F.Y. 2018-19, the case of the assessee was opened for reassessment u/s 148 and notices were issued. In response, the assessee submitted the reply. The details of the notices issued and replied by the assessee were as under:

Date of notice Under Issued By Response due dates Reply submitted Section on 09.02.2023 ITO, Pune-13(2) 01.03.2023 22.02.2023 148A

29.03.2023 148 ITO, Pune-13(2) 14.04.2023 11.10.2023 142(1) Faceless 23.10.2023 05.11.2023 Assessment Faceless 20.10.2023 143(2) 31.10.2023 05.11.2023 & Assessment 13.11.2023

14.02.2024 142(1) Circle (Intl Tax), 22.02.2024 21.02.2024 Jaipur Circle (Intl Tax), 03.03.2024 147 07.03.2024 04.03.2024 Jaipur 14.03.2024 144C Circle (Intl Tax), 17.03.2024 & Jaipur 26.04.2024

Thereafter, the penalty proceedings u/s-272A(1)(d) of the Act were initiated vide notice dated 17.05.2024 & 27.09.2024 to Rs. 10,000/- for the non-compliance of the notice issued on 11.10.2023 the due date of compliance was 23/10/2023, although the reply was filed on 05.11.2023. It is to be noted that the assessee was very particular in compliance of all the notices and the delay in submission of any single instance that too because of justificatory reason cannot be taken as intentional avoidance. It is also relevant to note that after notice dated 11.10.2023 four additional notices were issued and all of them were replied well in due dates. The Ld. A.O. disregarded the facts and imposed the penalty. Being aggrieved the assessee preferred the appeal before the Hon’ble CIT(A) on 25.11.2024. The Hon’ble CIT upheld the penalty imposed by the Ld. AO on the basis that the assessee deliberately avoided the non-compliance of the notice u/s-142(1) dated 11.10.2023 Hence, being aggrieved with the order of the Hon’ble CIT, Appeals the present appeal is filed. Now, the humble assessee wants to submit that: 1. Under the facts and circumstances of the case, the Ld. AO erred in levying the penalty order u/s-272A(1)(d) on the assessee for non- compliance of the notice dated 11.10.2023 despite the fact that the assessee had duly submitted the reply and therefore, the penalty order deserves to be quashed and set aside. The details of the notices issued by the Ld. AO and the reply submitted were as under : Notice Issued Issue Date Response Date Reply Date Under 148A 09-02-2023 01-03-2023 22-02-2023 - 148 29-03-2023 14-03-2023 - - Intimation Letter 28-08-2023 142(1) 11-10-2023 23-10-2023 05-11-2023

143(2) 20-Oct-2023 31-Oct-2023 05-11-2023 (Adjournment Requested) & 13-11-2023 142(1) 14-02-2024 22-02-2024 21-02-2024 - 147 02-03-2024 04-03-2024 147 03-03-2024 07-03-2024 04-03-2024 144C 04-03-2024 17-03-2024 144C 24-04-2024 26.04.2024 A perusal of the aforesaid table clearly shows that the assessee was very particular in compliance of each and every notice before the Ld. AO. However, the delay in submitting the reply to notice dated 11.10.2023 was genuine and bonafide and the request for adjournment was filed stating that: “Respected Officer, Due to illness in my family, I am away from home, and I do not have access to all the documents required in the response. Kindly grant me extension till November 15th 2023 to submit the response with required documents. Thanks, Amit Jain.” Then thereafter the assessee filed the reply on 13.11.2023 i.e. before 15/11/2023 as time requested. The Ld. A.O. never declined the additional time requested by the assessee and Subsequent notices were also complied with promptly, evidencing the assessee’s intention to fully cooperate.. Moreover, the assessee has been asked for a reply within a time span of 8 to 10 days. Notably, the assessee was residing in Jersey, United States of America, where the time zone is behind by 10 hours and 30 minutes as compared to India. The information sought pertains to the year 2018-19 and the reply can only be filed after getting the requisite details from the bank and papers lying at India. Thus the regular compliance by the assessee and singly delay that too because of justified reason and with the proper request for allowing some more time clearly shows that there was intentional avoidance.

In the present case, the penalty levied under Section 272A(1)(d) is not sustainable in light of Section 273B of the Income-tax Act, 1961. Section 273B clearly states that no penalty shall be imposed if the assessee proves that there was a reasonable cause for the failure. Here, the delay in responding to the notice dated 11.10.2023 was due to a genuine and bonafide reason — a family illness while the assessee was abroad, without access to necessary records. The assessee duly informed the AO through a written request for an extension and subsequently complied within the Amit Jain vs. Circle (Intl. Tax), Jaipur requested time. The consistent compliance with all other notices further reinforces the absence of any willful default or contumacious conduct. Therefore, the reasonable cause shown squarely falls within the protective ambit of Section 273B, warranting deletion of the penalty. Other Relevant case laws are as under:- 1) Sudhakar Reddy Mettu, Usa vs Acit., International Taxation-1, on 9 May, 2024-We find that the Assessing Officer has completed the assessment on the basis of the subsequent reply filed by the assessee dt.16.04.2021 in response to notice u/s- 142(1) of the Act dt. 08.04.2021. Once the Assessing Officer has completed the assessment after considering the replies filed by the assessee in response to various notices issued u/s 143(2) and 142(1) of the Act, in our considered opinion, it cannot be said that the assessee has not complied with notice issued by the Assessing Officer from time to time for completion of the assessment. Further, even if there is any non- compliance of the notice but subsequently, if the assessee replies to any notice issued by the Assessing Officer and such reply covers all the issues raised by the Assessing Officer in earlier notices issued under various sections, then it cannot be said that the assessee has complied with the details sought by the Assessing Officer tocomplete the assessment. Since the Assessing Officer has not completed the assessment after considering the replies submitted by the assessee in response to subsequent notice, in our considered opinion, the Assessing Officer ought not to have levied penalty u/s 272A(1)(d) of the Act for non- compliance of a single notice. This legal position is supported by the judicial pronouncement passed by ITAT, Hyderabad Bench in the case of P.C. Pantulu Vs. DCIT in dt.11.04.2018. Therefore, we are of the considered opinion that the Assessing Officer has erred in levying the penalty u/s 272A(1)(d) of the Act and the ld.CIT(A) without appreciating the facts sustained the penalty levied by the Assessing Officer. Thus, we set aside the order passed by the ld.CIT(A) and direct the Assessing Officer to delete the penalty levied u/s 272A(1)(d) of the Act. Accordingly, the appeal of the assessee is allowed.

2) Hanuman Prasad & Sons Vs DCIT/ACIT/ITO (ITAT Allahabad) Appeal Number: ITA No.

Amit Jain vs. Circle (Intl. Tax), Jaipur 20/ALLD/2022, 13/09/2022- It is concluded by the Hon’ble Bench as under:- “Once the assessee has made the compliance though after some delay but it was well before the assessment order was framed and the penalty order dated 10.1.2022. Therefore, it is not a case of non-compliance on the part of the assessee to the notice issued under section 142(1) dated 18.11.2019 but the compliance was made belatedly. Hence, the assessee made the compliance and the assessment was framed after considering the reply and document filed by the assessee then it does not fall in the category of non-compliance by the assessee at all. Hence, in the facts and circumstances of the case when the assessee finally complied with the notice and the Assessing Officer has duly considered the reply and the documents filed by the assessee while framing the assessment, then the subsequent penalty levied by the Assessing Officer is not justified. Even otherwise, when this is the year of changing the mode of assessment proceedings from physical to digital /electronically then the delay in compliance due to change in the mode of communication and proceedings is a bonafide reasons and not deliberate. Accordingly, the penalty levied by the Assessing Officer under section 272A(1)(d) is deleted.

raised by assessee is thus, allowed. In the result, the appeal of assessee is allowed.

5. Anshu Sharma, Jaipur vs Income Tax Officer, Ward 1(3), Jaipur on 11 April, 2023- We are satisfied that non-appearance of the assessee in response to the initial notice under section 142(1) of the Act was not deliberate. The year 2019 being the initial year of shift towards digital and electronic mode, the mistake appears to be bonafide. The assessee has been able to show reasonable cause for the failure to comply with statutory notice u/s. 142(1) of the Act. Thus, in our view penalty levied u/s. 272A(1)(d) of the Act is unsustainable. The Assessing Officer is directed to delete the penalty. In the result, impugned order is set-aside and appeal by the assessee is allowed."

Therefore, considering the facts of the case it cannot be said that the assessee has not complied with notice issued by the Assessing Officer from time to time for completion of the assessment. Further, even if there is any non-compliance of the notice but subsequently, if the assessee replies to any notice issued by the Assessing Officer and such reply covers all the issues raised by the Assessing Officer in earlier notices issued under various sections, then it cannot be said that the assessee has not complied with the details sought by the Assessing Officer to complete the assessment.

In respect of this ground, it is hereby submitted that from the aforesaid facts of the case and reply submitted in the above ground, it is clearly evident that the assessee had duly complied to all notices and only in a single notice the reply was filed with delay and even for the delay, the genuine and Bonafide reason was filed before the Ld. AO. The Hon’ble CIT, Appeals failed to appreciate the genuine and bonafide reason specified by the assessee. This action of Ld. AO and Hon’ble CIT is unjustified and against the Principle of Natural Justice. It is further relevant to note that section 273B is the overriding provision and in accordance with section 273B. “Notwithstanding anything contained in the provisions of clause (b) of sub-section (1) of section 271, section 271A, section 271AA, section 271B , section 271BA, section 271BB, section 271C, section 271CA, section 271D, section 271E, section 271F, section 271FA, 25[section 271FAA,] section 271FAB, section 271FB, section 271G, section 271GA, section 271GB, 26[section 271GC,]section 271H, section 271-I, section 271J, clause (c) or clause (d) of sub-section (1) or sub-section (2) of section 272A, sub-section (1) of section 272AA or section 272B or sub-section(1) or sub-section (1A) of section 272BB or sub-section (1) of section 272BBB or clause (b) of sub-section (1) or clause (b) or clause (c) of sub-section (2) of section 273, no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provisions if he proves that there was reasonable cause for the said failure.” The request letter for adjournment sought clearly to spell out that there was some problem and later the submitted reply within time requested state that the assessee was regular in compliance and there was reasonable cause too. Gyan Mata Radha Satyam Kriyayog Ashram Research Institute Vs ITO (ITAT-Allahabad),-25/02/2021-Hence, in the facts and circumstances of the case and in view of Section 273B of the Act when the assessee has finally complied with the notice issued by the Assessing Officer the penalty is not imposable as the explanation filed by the assessee was finally found to be correct and accepted in the quantum appeal. Consequently, the penalty levied u/s. 271(1)(b) of the Act is deleted.

Amit Jain vs. Circle (Intl. Tax), Jaipur 6. In the result, appeal filed by the assessee is allowed.

Penalty for failure to answer questions, sign statements, furnish information, returns or statements, allow inspections, etc. 272A. (1) If any person,- (a) being legally bound to state the truth of any matter touching the subject of his assessment, refuses to answer any question put to him by an income-tax authority in the exercise of its powers under this Act; or Amit Jain vs. Circle (Intl. Tax), Jaipur (b) refuses to sign any statement made by him in the course of any proceedings under this Act, which an income-tax authority may legally require him to sign; or (c) to whom a summons is issued under sub-section (1) of section 131 either to attend to give evidence or produce books of account or other documents at a certain place and time omits to attend or produce books of account or documents at the [place or time; or] (d) fails to comply with a notice under sub-section (1) of section 142 or sub- section (2) of section 143 or fails to comply with a direction issued under sub- section (2A) of section 142.

As we note that the assessee replied to the notice issued seeking time. We do not find any evidence that the said request was denied by passing a speaking order. Thus, when the impugned notice was attended by the assessee by filling the reply it cannot be a non-compliance. The bench also noted that when the matter carried before the ld. CIT(A) he merely confirmed the penalty stating that the assessee has not filed the details called for and deliberately avoided making compliance but has not discussed the fact the assessee’s request was not considered by the ld. AO or by him so far as the compliance made by filling the adjournment application. Thus, it cannot be pleaded by the revenue that the assessee has not made any compliance to the notice issued on 11.10.2023 and since the notice was replied seeking time we are of the considered view that there cannot be a non-compliance on the part of the assessee. Ergo we direct to delete the penalty of Rs. 10,000/- levied against the assessee.

In terms of these observations, the appeal of the assessee is allowed.

Amit Jain vs. Circle (Intl. Tax), Jaipur Order pronounced in the open court on 24/06/2025. Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 24/06/2025 *Ganesh Kumar, Sr. PS आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant- Amit Jain, Kota 2. izR;FkhZ@ The Respondent- DCIT-Circle Intl. Tax, Jaipur vk;dj vk;qDr@ The ld. CIT 3. vk;dj vk;qDr¼vihy½@The ld. CIT(A) 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. 6. xkMZ QkbZy@ Guard File (ITA No. 137/JP/2025) vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत