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Facts
The assessee faced a penalty of Rs. 10,000/- under Section 272A(1)(d) for delayed compliance with a notice issued under Section 142(1) during assessment proceedings for AY 2017-18. Although the assessee eventually furnished all required documents, leading to the AO accepting the returned income, the CIT(A) upheld the penalty.
Held
The Tribunal found that the assessee's subsequent compliance was complete and the delay had a plausible and reasonable cause. Since the AO accepted the returned income without making any additions based on the furnished documents, the penalty under Section 272A(1)(d) was not sustainable.
Key Issues
Whether a penalty under Section 272A(1)(d) is justifiable for delayed compliance with a notice under Section 142(1) when the assessee eventually complies, provides all documents, and the AO accepts the returned income without any additions.
Sections Cited
272A(1)(d), 142(1)
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Income Tax Appellate Tribunal, DELHI BENCH “E”, DELHI
Before: SHRI VIKAS AWASTHY & SHRI NAVEEN CHANDRA
अपीलाथ� �ारा/ Appellant by : Shri Pratap Gupta, CA �ितवादी�ारा/Respondent by : Shri S.L. Verma Sr. DR सुनवाई क� ितिथ/ Date of hearing : 18/06/2024 घोषणा क� ितिथ/ Date of pronouncement : 20/06/2024 आदेश/ORDER
PER VIKAS AWASTHY, JM:
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘the CIT(A)] dated 04.11.2023, for Assessment Year 2017-18, confirming levy of penalty u/s. 272A(1)(d) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).
Shri Pratap Gupta, appearing on behalf of the assessee submits that the assessee had filed return of income on 28.10.2017, declaring income of Rs.18,74,970/-. During the course of assessment proceedings the assessee had furnished requisite details and documents as sought by the Assessing Officer (AO). The AO after examining the details and documents furnished by the assessee accepted the returned income vide assessment order dated 22.12.2019. The AO has erred in levying penalty u/s. 272A(1)(d) of the Act vide impugned order dated 13.11.2019 without appreciating the fact that the query raised by the AO was quite lengthy and it took some times for the assessee to furnish detailed submissions based on the documentary evidences. It is not a case of non compliance. The assessee had furnished detailed explanation vide letter dated 11.12.2019. Eventually, on the basis of detailed explanation the AO accepted returned income of the assessee. Further, the ld. AR vehemently opposing penalty order submits that AO has not recorded any satisfaction for levy of penalty u/s. 272A(1)(d) in the assessment order. The ld. AR placed reliance on the decision in the case of Globus Infocom Ltd. Vs. DCIT in for AY 2010-11 decided on 29.06.2016, to contend that where the assessment has been made without any addition on the basis of documents furnished by the assessee no penalty u/s. 272A(1)(d) of the Act is leviable as subsequent compliance was considered as good compliance and the defaults committed earlier were ignored by the AO.
Per contra, Shri S.L. Verma representing the Department supporting the impugned order pointed that a perusal of assessment order would show that the AO had given ten opportunities to the assessee to furnish necessary documents. The AO made submissions after the last date of hearing on 11.12.2019 i.e. just before passing of assessment order. He further pointed that penalty u/s. 272A(1)(d) of the Act was levied vide order dated 13.11.2019 in respect of non compliance of notice dated 22.07.2019 issued u/s. 142(1) of the Act. Therefore, date of penalty order is prior to the date of assessment order. The penalty was levied for non compliance of the notice; hence, there was no requirement for AO to record satisfaction for levy of penalty in assessment order.
We have heard the submissions made by rival sides and have examined the orders of authorities below. The assessee is in appeal against the order of First Appellate Authority confirming levy of penalty of Rs. 10,000/- u/s. 272A(1)(d) of the Act, for non compliance of notice dated 22.07.2019 issued u/s. 142(1) of the Act.
It is an undisputed fact that subsequently the assessee has complied with the notice issued by the AO and had furnished necessary documents. The reason given by the assessee for delay in responding to the notice dated 22.07.2019 seems plausible. There appears to be reasonable cause for the said failure. The AO after examining the details and documents furnished by the assessee accepted the returned income for the impugned assessment year. Taking into consideration entire facts of the case, we are of considered view that penalty levied u/s. 272A(1)(d) of the Act is liable to be deleted. We, hold and direct accordingly.