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Facts
The assessee filed an appeal against a penalty order for non-compliance with seven notices issued under Section 142(1) of the Income Tax Act, 1961. The penalty imposed was Rs. 70,000/-. The assessee admitted the default but contended that most of the notices were issued during the Covid period and should be considered as a single default.
Held
The Tribunal acknowledged the non-compliance with notices but considered the impact of the Covid period. While Section 272A(1)(d) mandates a penalty of Rs. 10,000/- for each default, the Tribunal reduced the total penalty to Rs. 10,000/- for all seven non-compliances, taking into account the circumstances and the Covid period.
Key Issues
Whether the penalty imposed for non-compliance with multiple Section 142(1) notices, some issued during the Covid period, should be aggregated or considered differently due to the prevailing circumstances.
Sections Cited
253, 272A(1)(d), 142(1), 246A, 144, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI B.M. BIYANI & SHRI PARESH M JOSHI
आदेश / O R D E R
Per Paresh M Joshi, J.M:
This is an appeal filed by the assessee Under Section 253 of the Income Tax Act, 1961 (hereinafter referred to as the “Act” for sake of brevity) before this Tribunal. The assessee is aggrieved by the order bearing No. ITBA/NFAC/S/250/2024- 25/1070216221(1) dated 08.11.2014 passed by the Ld. CIT(A) u/s 250 of the Act which is hereinafter referred to as the “Impugned order”. The relevant Assessment Year is 2018-19
Page 1 of 7 to 31.03.2018.
FACTUAL MATRIX 2.1 That as and by way of a penalty order made u/s 272A(1)(d) of the Act a penalty of Rs.70,000/- was imposed on the assessee as the assessee had failed to comply with 7 notice(s) issued to him on different dates from 02.12.2019 to 05.10.2020 u/s 142(1) of the Act. That the aforesaid penalty order bears No. ITBA/PNL/F/272A(1)(d)/2021-22/106368783(1) and that same is dated 13.10.2021 which is hereinafter referred to as the “impugned penalty order”.
2.2 That the assessee being aggrieved by the aforesaid “impugned penalty order” prefers first appeal u/s 246A of the Act before the Ld. CIT(A) who by the “impugned order” has dismissed the appeal of the assessee on the grounds and reasons stated therein. The core ground being non-compliance of Section 142(1) notices numbering seven wherein there was absolute non - appearance of the assessee before the Ld. A.O. Even in first appeal the assessee remained non-compliant despite opportunities by way of several notices. The “impugned penalty
Page 2 of 7 dismissed.
2.3 That the assessee being aggrieved by the “impugned order” has preferred the instant second appeal before this Tribunal and has raised following grounds of appeal in Form No.36 against the “impugned order” which are as under:-
“1. That on the facts and in the circumstances of the case of the assessee the Learned Commissioner of Income Tax (National Faceless Appeal Centre), Delhi was not justified in confirming the penalty levied by the AO at Rs 70,000.00. 2. The assessee craves leave to add, alter amend or withdraw any ground of appeal on or before the time of hearing”.
3. Record of Hearing 3.1 The hearing in the matter took place before this Tribunal on 16.07.2025 when the Ld. AR for and on behalf of the assessee appeared before us and interalia contended that the “impugned penalty order” and so also the “impugned order” is illegal, bad in law and not proper. It should be set aside by this Tribunal in exercise of it’s appellate jurisdiction. It was submitted that the penalty amount is in Rs.70,000/- in the aggregate. The default is admitted. Few notice(s) were of Covid period. In all seven notices u/s 142(1) of the Act were issued and served upon the assessee
Page 3 of 7 Notice(s) are not on record and its contents are unknown. But all were u/s 142(1) of the Act and nature of default is same i.e. non- compliance to notice u/s 142(1) of the Act. Assessment order (quantum) was passed u/s 144 of the Act. While admitting default the Ld. AR prayed that instead of treating seven default only one default should be counted as most of the notice(s) pertains to Covid period. Per contra Ld. DR appearing for and on behalf of the Revenue submitted that in so far as first three notices are considered which are dated 02.12.2019, 30.01.2020 & 24.02.2020 is concerned it is a period prior to Covid whereas notice(s) dated 15.07.2020, 14.08.2020, 31.08.2020 and 15.10.2020 are concerned notice(s) are during the Covid period.
Finally after some debate issue was left to the Tribunal to take appropriate decision according to law. In rejoinder the Ld. AR has placed reliance on the decisions of ITAT, Delhi Bench dated 06.05.2015 in case of Rekha Rani V/s DCIT-CC-Circle 8 in dated 05.03.2025 in case of Archana Prashant Date V/s ITO
Page 4 of 7 only and not several.
Observations,findings & conclusions.
4.1 We now have to decide the legality, validity and the proprietery of the “impugned order” basis records of the case and rival contentions canvassed before us.
4.2 We have carefully perused the records of the case as presented to this Tribunal by both Ld. AR & Ld. DR to determine the legality, validity of the “impugned order” basis law and by following due process .
4.3 We basis records of the case and so also after hearing and upon examining the contentions are of the considered opinion that the “impugned order” has imposed penalty of Rs.70,000/- against 7 notice(s) issued u/s 142(1) of the Act for which there was non-compliance on each notice(s). Simultaneously notice(s) were during Covid period particularly first phase. While Section 272A(1)(d) of the Act under which penalty is imposed contemplates penalty of Rs.10,000/- for each default or failure and there is use of the word “shall” which makes it a mandatory provision but nevertheless since it is not known as to what were Page 5 of 7 Covid period we deem fit to impose penalty of Rs.10,000/- for all 7 notice(s) in respect of which there was non-compliances.
Accordingly we reduce penalty from Rs.70,000/- to Rs.10,000/- in order to meet ends of justice.
4.4 In the premises set out herein above we set aside the “impugned penalty order” and reduce the penalty which is fixed i.e. Rs.10,000/- instead of Rs.70,000/- as imposed.
Order 5.1 In the result appeal of the assessee is partially allowed as aforesaid.
5.2 Appeal of the assessee is partly allowed.
Order pronounced in open court on 21.07.2025.