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Facts
During assessment proceedings for AY 2015-16, the assessee failed to comply with statutory notices issued u/s 142(1). Consequently, the AO imposed a penalty of Rs. 20,000/- u/s 271(1)(b) for non-compliance, which was subsequently upheld by the CIT(A). The assessee contended that the notices went to their email's spam folder.
Held
The Tribunal found that the notices going to the assessee's spam folder constituted a 'reasonable cause' for not responding. As the assessee became aware of the notices only upon physical receipt, the Tribunal set aside the orders of the lower authorities and deleted the penalty.
Key Issues
Whether notices issued by the AO going to the assessee's spam folder constitutes a reasonable cause for non-compliance, thereby warranting the deletion of penalty imposed under section 271(1)(b).
Sections Cited
271(1)(b), 142(1), 274
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “G”, NEW DELHI
Before: SHRI SHAMIM YAHYA, & SHRI YOGESH KUMAR USShri Satinder Pal,
Appellant by : Sh. Sudarsun Roy, Adv. Respondent by : Ms. Shashi Kajle, Sr. DR Date of hearing : 30.10.2024 Date of pronouncement : 05.11.2024 ORDER
PER SHAMIM YAHYA, AM :
The Assessee has filed the instant Appeal against the Order of the Ld. CIT(A)/National Faceless Appeal Centre (NFAC), Delhi dated 15.5.2024, relating to assessment year 2015-16. The solitary issue raised by the assessee in the appeal is relating to sustaining the penalty of Rs. 20,000/- u/s. 271(1)(b) of the Act.
The brief facts of the case are that during the assessment proceedings, the assessee did not make compliance with the statutory notices issued u/s. 142(1) of the Act on 16.11.2022 and 23.12.2022. Accordingly, the AO initiated penalty proceedings u/s. 274 r.w.s. 271(1)(b) of the Act and issued the show cause notices asking for assessee’s explanation. The assessee did not file any response to the notices. Resultantly, the AO imposed the penalty of Rs. 20,000/- u/s. 271(1)(b) of the Act for non-compliance with the notices u/s. 142(1) of the Act. Against the above order, assessee appealed before the Ld. CIT(A), who dismissed the appeal of the assessee.
Aggrieved with the aforesaid order of the Ld. CIT(A) assessee is in appeal before us.
We have heard both the parties and perused the records. Ld. Counsel for the assessee pleaded that the notices issued by the AO went to the Spam Folder of the assessee and assessee only came to know about the notices when copy of physical notice was given to him. In these circumstances, he submitted that there is a reasonable cause for non-responding to the notices, and therefore, assessee need not be penalized.
Per contra, Ld. DR relied upon the orders of the authorities below.
Upon careful consideration, we find that there is a reasonable cause for the assessee for non-responding the notices, as they went to the spam folder of the assessee, hence, the assessee could know about the notice when physical copy of the notice was received. Therefore, in the interest of justice, the orders of the authorities below are set aside and the penalty in dispute sustained by the ld. CIT(A) is hereby deleted.
In the result, the Appeal filed by the Assessee stands allowed.
Order pronounced on 05/11/2024.