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Facts
The assessee was under custody as an under-trial prisoner in Central Jail, Hisar, from March 28, 2021, to August 6, 2022. During this period, the Assessing Officer issued notices under sections 142(1) and 143(2) of the Act for assessment years 2015-16 to 2021-22, which the assessee could not comply with due to incarceration. Consequently, penalties were levied under sections 271(1)(b) and 272A(1)(d) for non-compliance.
Held
The Tribunal found that the notices could not have been properly served on the assessee while he was in judicial custody, constituting a sufficient cause for non-compliance. Therefore, the levy of penalty for non-compliance was not justified. The Assessing Officer was directed to delete the penalties for the specified assessment years.
Key Issues
Whether penalties for non-compliance with notices under sections 142(1)/143(2) are justified when the assessee was in judicial custody during the relevant period, preventing proper service and compliance.
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