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Facts
The assessee, a primary agricultural credit society, was issued notices under section 142(1) for assessment year 2017-18, which were not complied with, leading to an ex-parte assessment order. The Assessing Officer (AO) later initiated penalty proceedings under section 272A(1)(d) for non-compliance with these notices, imposing a penalty of Rs. 40,000/-.
Held
The Tribunal held that the non-compliance with the notices occurred during the COVID-19 pandemic period, during which the Supreme Court had extended all limitation periods. Considering these exceptional circumstances, the non-compliance could not be deemed wilful or deliberate. Furthermore, the assessment order related to the penalty had also been set aside.
Key Issues
Whether the penalty imposed for non-compliance of notices during the COVID-19 pandemic, considering Supreme Court's extension of limitation periods, is sustainable.
Sections Cited
272A(1)(d), 142(1), 148, 144, 147, 250
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Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO & SHRI ANIKESH BANERJEE
O R D E R Per Anikesh Banerjee, JM:
The Instant appeal of the assessee was filed against the order of the Learned National Faceless Appeal Centre, Delhi [for brevity, ‘ Ld.CIT(A)’] passed under section 250 of the Income-tax Act, 1961 (in short, the Act’) for Assessment Year 2017-18, date of order 20/06/2025. The impugned order emanated from the order of the Assessment Unit, Income Tax Department (in short, ‘Ld.AO’) passed under section 272A(1)(d) of the Act, date of order 12/09/2022.
Brief facts of the case are that theassessee is a primary agricultural credit society registered under the Kerala Cooperative Societies Act, 1969. The society functions under regulatory framework let down by the act asper the cooperative department of Government of Kerala. The assessee’s case was reopened under section 148 of the Act on 30/03/2021 and the notices under section 142(1) of the Act were issue in several occasions. But the assessee did not comply the same notices. The assessment order was passed exparte under section 144r.w.s 147 of the Act on dated 22/03/2022 by confirming the addition. The appeal was filed before the Ld. CIT(A) and the quantum appeal was set asideLd. AO for further adjudication by the order dated 20/06/2025.
The Ld. AO initiated the penalty proceeding under section 272A(1)(d) of the Act and imposed penalty for noncompliance of notices U/s 142(1) of the Act on dated 14/09/2021, 24/11/2021, 09/12/2021 & 18/02/2022total amount to Rs. 40,000/-. The assessee stated that the all the notices are issued during the COVID-19 Pandemic. There is sufficient reason for noncompliance of notices during the assessment proceeding. In argument the Ld. AR stated that the issue is covered by the ruling of the Hon’ble Supreme Court by its order in Suo Moto W.P.(c) No. 3 of 2020 dated 10/01/2022 extended all limitation periods until 28/02/2022.
The Ld. DR argued stands in favour of the orders of revenue authorities.
We have considered the submissions of both the parties and perused the material available on record. It is an admitted fact that all the notices under section 142(1) of the Act were issued during the period affected by the COVID-19 pandemic, when the Hon’ble Supreme Court, by its order in Suo Moto W.P. (C) No. 3 of 2020 dated 10.01.2022, had extended all limitation periods up to 28.02.2022. Considering the exceptional circumstances prevailing during that period, the non-compliance of the assessee to the said notices cannot be regarded as wilful or deliberate.Further, on perusal of the record, we find that the assessment order related to the impugned penalty has also been set aside. Accordingly, the assessment proceedings are presently pending for fresh adjudication before the Ld. CIT(A).Accordingly, the penalty levied under section 272A(1)(d) of the Act is not sustainable in the eyes of law.Hence, we direct the Ld. AO to delete the penalty amount to Rs. 40,000/-. The appeal of the assessee is allowed.