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Facts
The assessee filed appeals against an order by the Ld.CIT(Appeals)-3, Gurgaon, which sustained penalties levied under sections 271(1)(b) and 272A(1)(d) of the Income Tax Act for non-compliance with notices issued under sections 142(1) and 143(2) for Assessment Years 2015-16 to 2021-22. The assessee's counsel contended that the assessee was in judicial custody as an under-trial in Central Jail, Hisar, from March 28, 2021, to August 6, 2022, during which period the notices dated February 25, 2022, could not have been served or complied with.
Held
The Tribunal, after verifying the custody certificate, concluded that the assessee was indeed imprisoned during the relevant period, making it impossible for the notices to be served. It held that the assessee had sufficient cause for non-compliance. Consequently, the Tribunal directed the Assessing Officer to delete the penalties levied.
Key Issues
Whether penalties for non-compliance with income tax notices are justified when the assessee was under judicial custody during the period of non-compliance, constituting a sufficient cause.
Sections Cited
271(1)(b), 272A(1)(d), 142(1), 143(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “SMC” NEW DELHI
Before: SHRI CHALLA NAGENDRA PRASAD
सुनवाईक�तारीख/ Date of hearing: 25.01.2024 23.04.2024 उ�ोषणाक�तारीख/Pronouncement on आदेश /O R D E R
All these appeals are filed by the assessee against common order of the Ld.CIT(Appeals)-3, Gurgaon dated 29.08.2023 in sustaining the penalty levied u/s 271(1)(b)/272A(1)(d) of the Act for non-compliance of notice/notices issued u/s 142(1)/143(2) of the Act.
Ld. Counsel for the assessee, at the outset, submits that the Assessing Officer levied penalty u/s 271(1)(b)/272A(1)(d) of the Act for non-compliance of notices issued u/s 142/143(2) of the Act. The Ld. Counsel for the assessee, at the outset, submits that assessee
I.T.A.Nos.2971 to 2977/Del/2023 was under custody as under trial in Central Jail, Hisar during the period from 28.03.2021 to 06.08.2022 and, therefore, the assessee could not respond to the notices issued by the Assessing Officer.
Ld. Counsel submits that since the assessee is in Central Jail as under trial the notices issued by the Assessing Officer could not have been served and, therefore, there is no justification for levying penalty for non-compliance.
Ld. DR supported the orders of the authorities below.
Heard rival submissions, perused the orders of the authorities below.
On perusal of the custody certificate issued by the Deputy Superintendent, Central Jail, Hisar it is very much clear that the assessee was under custody as under trial for the period from 28.03.2021 to 06.08.2021. In the circumstances, the notices issued by the AO u/s 142(1)/143(2) of the Act could not have been served on the assessee. From the perusal of the penalty orders passed u/s 271(1)(b)/272A(1)(d) of the Act it is noticed that penalty was levied for non-compliance of the statutory notice issued u/s 142(1) dated 25.02.2022 for the assessment years 2015-16 to 2021-22. The notice dated 25.02.2022 issued u/s 142(1) could not have been served on I.T.A.Nos.2971 to 2977/Del/2023 the assessee as he was under the custody from 28.03.2021 to 06.08.2022, therefore, the question of levy of penalty for non- compliance does not arise. Even otherwise the assessee is prevented from sufficient cause in not responding to the notice issued u/s 142(1) dated 25.02.2022. Thus, the AO is directed to delete the penalty levied u/s 271(1)(b)/272A(1)(d) of the Act for the assessment years 2015-16 to 2021-22. The grounds raised by the assessee are allowed.
In the result, all the appeals of the assessee are allowed.
Order pronounced in the open court on 23/04/2024