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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI B.M. BIYANI, & SHRI PARESH M. JOSHI
आदेश/O R D E R
Per Bench:
The captioned seven appeals for seven assessment-years [“AY”] 2013-14 to 2019-20 are filed by assessee challenging seven separate orders of first- appeal, all dated 14.11.2024 and all passed by learned Commissioner of Income-Tax (Appeals)-3, Bhopal [“CIT(A)”], by which respective seven penalty-orders all dated 25.03.2021 and passed by ACIT, Central Circle-2, Bhopal [“AO”] imposing a penalty of Rs. 10,000/- in each of the seven
Page 1 of 6 to 22/Ind/2025 Assessment years: 2013-14 to 2019-20 assessment-years u/s 271(1)(b)/270A(1)(d) of the Income-tax Act, 1961 [“the act”], have been upheld.
Heard the learned Representatives of both sides and the case records perused.
At the start of hearing, learned Representatives of both sides agreed that the underlying facts and controversy involved in these seven appeals are identical to the seven appeals of another assessee “Rohit Darak”, being to 15/Ind/2025 for AYs 2013-14 to 2019-20 except a small change in the dates of notices u/s 142(1) issued by AO which were not complied by assessee and for which the AO imposed penalties but that small change will not make any impact on the adjudication. It is, therefore, agreed by both sides that the adjudication made in the appeals of “Rohit Darak” shall apply with equal force to these appeals.
We have already disposed of the appeals of “Rohit Darak” vide order dated 31.07.2024. Since the learned Representatives are ad idem that the underlying facts and controversy are identical, we need not elaborate anything separately except to re-produce the relevant portion of our order passed in Shri Rohit Darak’s appeals, reading as under:
“4. Ld. AR for assessee made a brief submission about background of assessee’s case. He submitted that assessee is based at Indore and there was a search u/s 132 on 16.05.2018 carried out by Income-tax Department upon assessee’s premise. Consequent upon search, the case of assessee was centralized in the office of AO at Bhopal and thereafter the AO at Bhopal conducted assessment proceedings u/s 153A. During assessment proceedings, the AO issued certain notices to assessee. For AY 2013-14, the AO issued notices u/s 142(1) dated 19.02.2021 & 22.02.2021 requiring the assessee to Page 2 of 6 to 22/Ind/2025 Assessment years: 2013-14 to 2019-20 make compliances by 24.02.2021 & 26.02.2021 respectively but finding non- compliance from assessee, the AO imposed penalty of Rs. 10,000/- u/s 271(1)(b) vide penalty-order dated 30.03.2021 [Similar penalty of Rs. 10,000/- has been imposed for all other assessment-years]. Aggrieved, the assessee carried matter in first-appeal but did not get any relief. Now, the assessee has come in next appeal before ITAT.
With aforesaid brief details, Ld. AR made a straightforward submission that the assessee was having a ‘reasonable cause’ for non-compliance of the impugned notices dated 19.02.2021 & 22.02.2021 issued by AO and hence the assessee is entitled to benefit of section 273B. To substantiate the existence of ‘reasonable cause’, the Ld. AR made two-fold submissions as under: (i) He submitted that the assessee is located at Indore and the AO’s office was located at Bhopal and it was a case of Central Circle being emanating from search. He submitted that the AO issued impugned notices dated 19.02.2021 & 22.02.2021 requiring compliances from assessee by 24.02.2021 & 26.02.2021 but at the relevant time, there was Covid-19 Pandemic and entire world was facing the challenge of serious pandemic and the assessee was not exception. He submitted that the AO required assessee to make compliance within a short span of just 4 / 5 days and that too during pandemic period which was not possible or practicable for assessee to comply with. (ii) Without prejudice, he submitted the sequence of proceedings done by AO in assessee’s case. He submitted that the AO initially issued notice dated 30.01.2020 u/s 153A followed by a notice dated 04.11.2020 u/s 142(1) calling the assessee to file return of income. The assessee filed a reply-letter dated 05.12.2020 to AO requesting to provide various statements/material/ documents, etc. recorded/found/seized during search action to enable the assessee to prepare and file return; the request-letter filed by assessee is acknowledged by seal dated 09.12.2020 of AO’s office (Page 6 of Paper-Book). However, the AO did not supply the required material and instead issued notice dated 09.12.2020 u/s 142(1) to assessee again insisting for filing of return (Page 1 of Paper-Book). In response, the assessee filed another letter dated 15.12.2020 inviting AO’s attention to his earlier letter dated 05.12.2020 and re-requesting for supply of required material. The assessee also paid a sum of Rs. 100/- by way of fee through challan and submitted a copy of challan to AO (Page 2-3 of Paper-Book). But the AO still did not supply the material needed by assessee and therefore the assessee was unable to prepare and file a proper return. Ld. AR submitted that contrary to assessee’s repeated requests, the AO issued impugned notices dated 19.02.2021 & 22.02.2021 u/s 142(1) to assessee but how the assessee would file replies to such notices when the material was not supplied by AO and no return was filed by assessee. Ld. AR pointed out that AO did not supply the required documents till the completion of assessment.
Page 3 of 6 to 22/Ind/2025 Assessment years: 2013-14 to 2019-20 6. Per contra, Ld. DR for revenue supported the orders of lower-authorities by raising following contentions and requested to uphold the same: (i) He submitted that the AO issued notice dated 30.01.2020 u/s 153A calling the assessee to file return within 30 days but the assessee did not comply with such notice and did not file return. He submitted that there was no Covid at that time. He drew us to Para 4.1.3. of impugned order wherein the CIT(A) has re-produced Para 2 of assessment-order in which the AO noted that an e-mail was sent to assessee to collect copies of documents on or before 13.03.2020 and file return on or before 17.03.2020. However, the assessee neither collected documents nor filed return. Taking into account this noting made by AO in assessment- order, the CIT(A) has observed that the department has co-operated the assessee but the non-collection of documents was on the part of assessee. Ld. DR submitted that the CIT(A) has looked into overall conduct of assessee and thereafter upheld the penalty. (ii) Alternatively, he submitted that during Covid period, when the officers of department were working, the assessee could also make compliances of the impugned notices issued by AO. He submitted that at least the assessee could respond to the impugned notices by way of e-mail but that was also not done.
In rejoinder, Ld. AR submitted that the assessee is not aware of any e- mail having been received from AO’s office as being claimed by revenue but even assuming (but not accepting) that the e-mail was received, then also it was a Covid-2019 period because the wave of Covid-2019 started much earlier and the e-mail claimed to have been sent to assessee asking to collect documents on or before 13.03.2020 and file return on or before 17.03.2020 was also a period of pandemic. Ld. AR submitted that the assessee could not be expected to collect documents from Bhopal during such difficult time of pandemic.
We have considered rival submissions of both sides and carefully perused the case record including the orders of lower authorities. The assessee is aggrieved by the penalty of Rs. 10,000/- imposed by AO u/s 271(1)(b) for non-compliance of notices u/s 142(1) dated 19.02.2021 & 22.02.2021. Ld. AR/assessee is harping on the provision of section 273B, therefore at first we re-produce the same: “273B. Notwithstanding anything contained in the provisions of clause (b) of sub-section (1) of section 271, ……., clause (d) of sub- section (1) or sub-section (2) of section 272A, 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.”
On a careful and judicious consideration of the facts of assessee in the light of above provision of section 273B, we find a strong merit in the twin submissions made by Ld. AR as narrated above. Before proceeding further, we take note that the wave of Covid-2019 pandemic started in the year 2019
Page 4 of 6 to 22/Ind/2025 Assessment years: 2013-14 to 2019-20 in China and it started making progress in India also somewhere in January, 2020. Ultimately, taking a suo moto cognizance of the challenges faced by country, the Hon’ble Supreme Court stepped and passed Order dated 23.03.2020 in Suo Moto Writ Petition (Civil) No. 3 of 2020 in Re: Cognizance for Extension of Limitation, extending the time limitations for various compliances from 15.03.2020 onwards. This Order remained effective upto 28.03.2022 (with a further grace period of 90 days). Now, reverting to the contentions raised by Ld. AR, the first contention is such that the AO issued impugned notices dated 19.02.2021 & 22.02.2021 during Covid pandemic period and the AO required the assessee to make compliances within a short period of 4/5 days during such difficult time. We find a strong merit in this very contention of Ld. AR that the non-compliance by assessee during exceptional period of Covid was a reasonable situation fit for relaxation from penalty in terms of section 273B. Now, the second contention raised by Ld. AR that the AO did not supply documents/material to assessee and therefore the assessee was not able to make compliances also has some force. The Ld. DR for revenue is harping on the noting made by AO in assessment-order that an email was sent to assessee to collect documents by 13.03.2020 and file return by 17.03.2020 but the Ld. AR for assessee claims that the assessee is not aware of any such email having been received from AO’s office. Further, the Hon’ble Supreme Court has granted extension for various compliances from 15.03.2020 itself and considered from that point, the date of 13.03.2020 fixed by AO is slightly before and the date of 17.03.2020 is very much after 15.03.2020. Therefore, the assessee deserves benefit of Covid pandemic at that stage also. In nutshell, we find that there is a case of ‘reasonable cause’ as contemplated u/s 273B on account of Covid pandemic and therefore the assessee should not be saddled with the levy of penalty. We may also make a useful reference to the landmark decision of Hon’ble Supreme Court in Hindustan Steel Ltd. Vs. State of Orissa (1972) 83 ITR 26 (SC) holding thus while dealing a case of penalty imposed under Orissa Sales Tax Act, 1947: “……Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute. Those in charge of the affairs of the company in failing to register the company as a dealer acted in the honest and genuine belief that the company was not a dealer. Granting that they erred, no case for imposing penalty was made out.”
Thus, considering the facts of case as discussed above in the light of provisions of section 273B as well as the above decision of Hon’ble Apex Court in Hindustan Steels, we are inclined to delete the penalty imposed by AO and we do so. The assessee succeeds in the appeal of AY 2013-14 and so also appeals of all other assessment-years.
Page 5 of 6 to 22/Ind/2025 Assessment years: 2013-14 to 2019-20 11. Resultantly, all these appeals are allowed.” 5. Applying the above adjudication as made in Rohit Darak’s appeals, we are inclined to delete the penalties imposed by AO in these seven appeals.
Thus, the assessee succeeds in all seven appeals.
Resultantly, all these appeals are allowed.
Order pronounced in the open court on 01/08/2025.