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Facts
The assessee, a primary agricultural society in a remote area, failed to respond to two notices issued under section 142(1) during assessment proceedings under section 143(3). Consequently, the Assessing Officer imposed a penalty of Rs. 20,000/- under section 272A(1)(d). The Ld. CIT(A)/NFAC dismissed the assessee's appeal against this penalty order.
Held
The Tribunal acknowledged the assessee's operational difficulties and limited technical knowledge of its staff but emphasized the assessee's responsibility to comply with notices. While agreeing that non-compliance occurred, the Tribunal held that a penalty for both defaults was excessive and should be restricted to the non-compliance with the second notice. Therefore, the penalty under section 272A(1)(d) was reduced from Rs. 20,000/- to Rs. 10,000/-.
Key Issues
Whether the penalty imposed under section 272A(1)(d) for non-compliance with notices under section 142(1) should be upheld or reduced, considering the assessee's operational circumstances.
Sections Cited
143(3), 142(1), 272A(1)(d)
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Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: SHRI MANISH BORAD & SHRI VINAY BHAMORE
ORDER
PER VINAY BHAMORE, JM:
This appeal filed by the assessee is directed against the order dated 05.03.2025 passed by Ld. CIT(A)/NFAC for the assessment year 2021-22.
The appellant has raised the following grounds of appeal :-
1. On the facts and in the circumstances of the case and in law the ld. CIT(A) erred in not considering the grounds of appeal raised along with the appeal Form No.35.
On the facts and in the circumstances of the case and in law the ld. CIT(A) erred in observing that; The society is situated at a very small village place and people working in the society are not technosavy. Notices communicated electronically through emails were not checked regularly and hence same were communicated belatedly to the consultant and hence there was non-compliance to the statutory notices.
The appellant craves for leave to add alter amend delete etc the above grounds of appeal
in the interest of natural justice.”
3. Facts of the case, in brief, are that the assessee is a primary agricultural society doing business at a remote area of Maharashtra. During 143(3) assessment proceedings, response to two notices issued u/s 142(1) of the IT Act was not made by the assessee and therefore, vide order dated 23.06.2023 penalty u/s 272A(1)(d) of Rs.20,000/- was imposed by the Assessing Officer.
4. Being aggrieved with the above penalty order, the assessee preferred an appeal before Ld. CIT(A)/NFAC, who vide order dated 05.03.2025 dismissed the appeal filed by the assessee.
5. It is this order against which the assessee is in appeal before this Tribunal.
6. When the appeal was called for hearing, neither anybody appeared on behalf of the appellant-assessee nor any application for adjournment was filed, therefore, we proceed to decide the appeal on the basis of material available on record as well as after hearing Ld. DR.
We have heard Ld. DR and perused the material available on record. In this regard, we find that admittedly there was non-compliance on two occasions before the Assessing Officer and therefore, penalty of Rs.10,000/- for each default was imposed totalling to Rs.20,000/- u/s 272A(1)(d) of the IT Act. We find that the assessee society is situated at remote area and was working with only one staff, who was working part time and was also not well conversant with technology, which resulted in non-compliance before the Assessing officer. However, we find that it was the duty and responsibility of the assessee to comply with each and every notice issued by the Assessing Officer.
Considering the totality of the facts of the case, we are of the considered opinion that if first notice was not complied, then the assessee was supposed to comply at least with the second notice issued by the Assessing Officer. Accordingly, we deem it appropriate to set-aside the order passed by Ld. CIT(A)/NFAC and direct the Assessing Officer to restrict the penalty of Rs.20,000/-